The following data have been gathered for a capital investment decision.The amounts relate to a 14 percent discount factor.

a.Compute the present value of the following cash inflows.Use a discount rate of 14 percent.
b.What would have been the present value of the cash flows if they were received in equal installments over the five-year period at the same discount rate?
c.If the answers to parts (a)and (b)differ,explain the reason(s)why.

Question

The following data have been gathered for a capital investment decision.The amounts relate to a 14 percent discount factor.
 
a.Compute the present value of the following cash inflows.Use a discount rate of 14 percent.
  b.What would have been the present value of the cash flows if they were received in equal installments over the five-year period at the same discount rate?
c.If the answers to parts (a)and (b)differ,explain the reason(s)why.

Quizplus · Accepted Answer

The Answer of The following data have been gathered for a capital investment decision.The amounts relate to a 14 percent discount factor.
 
a.Compute the present value of the following cash inflows.Use a discount rate of 14 percent.
  b.What would have been the present value of the cash flows if they were received in equal installments over the five-year period at the same discount rate?
c.If the answers to parts (a)and (b)differ,explain the reason(s)why.

The Following Data Have Been Gathered for a Capital Investment