Phosfranc Inc., is expecting the following cash flows starting at the end of the year-$133,245, $152,709, $161,554, and $200,760. If their opportunity cost of capital is 9.4 percent, find the future value of these cash flows. (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

The future value of the cash flows can be calculated using the formula:FV = PV * (1 + r)^nwhere:PV is the present value of the cash flowsr is the opportunity cost of capitaln is the number of yearsIn this case, the present value of the cash flows is $133,245 + $152,709 + $161,554 + $200,760 = $648,268. The opportunity cost of capital is 9.4%, and the number of years is 4. Therefore, the future value of the cash flows is:FV = $648,268 * (1 + 0.094)^4 = $734,731Therefore, the correct answer is A.