For the cash flows given in the table below, evaluate the unknown value "A". Use an interest rate of 6%.
$$\begin{array} { | l | l | l | l | l | l | l | }
\hline \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 \
\hline \text { Cash flow } & 22,000 & - 2 A & - 2 A & - 2 A & - 2 A & - 5 A \
\hline
\end{array}$$

Question

For the cash flows given in the table below, evaluate the unknown value "A". Use an interest rate of 6%.
$$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 \
\hline \text { Cash flow } & 22,000 & - 2 A & - 2 A & - 2 A & - 2 A & - 5 A \
\hline
\end{array}$$

Quizplus · Accepted Answer

The present value of cash flows must equal zero for the net present value (NPV) to be zero. Solving the equation $22,000 - 2A(PVIFA_{6\%,4}) - 5A(PVIF_{6\%,5}) = 0$ gives A = $2,062.55.

For the Cash Flows Given in the Table Below, Evaluate