Jiminez Company has two investment opportunities.Both investments cost $5,000 and will provide the following net cash flows: $$\begin{array} { l r r }
\text { Year } & \text { Irvestrnent A } & \text { Irvestrnent B } \
1 & \mathbf {\$ 3 , 0 0 0 } & \mathbf {\$ 3 , 0 0 0 } \
2 & \mathbf { 3 , 0 0 0 } & 4,000 \
3 & \mathbf { 3 , 0 0 0 } & 2,000 \
4 & \mathbf { 3 } , 000 & 1,000
\end{array}$$ What is the total present value of Investment A's cash flows assuming an 8% minimum rate of return? (PV of $1 and PVA of $1)(Use appropriate factor(s)from the tables provided.Do not round your intermediate calculations.Round your answer to the nearest whole dollar.)

Question

Jiminez Company has two investment opportunities.Both investments cost $5,000 and will provide the following net cash flows: $$\begin{array} { l r r } 
\text { Year } & \text { Irvestrnent A } & \text { Irvestrnent B } \
1 & \mathbf {\$ 3 , 0 0 0 } & \mathbf {\$ 3 , 0 0 0 } \
2 & \mathbf { 3 , 0 0 0 } & 4,000 \
3 & \mathbf { 3 , 0 0 0 } & 2,000 \
4 & \mathbf { 3 } , 000 & 1,000
\end{array}$$ What is the total present value of Investment A's cash flows assuming an 8% minimum rate of return? (PV of $1 and PVA of $1)(Use appropriate factor(s)from the tables provided.Do not round your intermediate calculations.Round your answer to the nearest whole dollar.)

Quizplus · Accepted Answer

To calculate the present value of Investment A's cash flows at an 8% discount rate, we use the Present Value Annuity (PVA) factor for 4 periods at 8%, which is typically found in financial tables. Assuming the PVA factor is approximately 3.31213 (this factor can slightly vary depending on the source), we multiply the annual cash flow of $3,000 by this factor: $3,000 * 3.31213 = $9,936.39. Since the initial investment is $5,000, we subtract this amount from the total present value to find the net present value: $9,936.39 - $5,000 = $4,936.39. Rounded to the nearest whole dollar, the answer is approximately $4,936.

Jiminez Company Has Two Investment Opportunities What Is the Total Present Value of Investment A's Cash