FV of multiple cash flows: Stiglitz, Inc., is expecting the following cash flows starting at the end of the year-$113,245, $132,709, $141,554, and $180,760. If their opportunity cost is 9.6 percent, find the future value of these cash flows. (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

Using the future value formula: FV = CF1*(1+r)^n-1/(r)+CF2*(1+r)^n-2/(r)+CF3*(1+r)^n-3/(r)+CF4*(1+r)^n-4/(r)

FV = $113,245*(1+0.096)^4/(0.096)+$132,709*(1+0.096)^3/(0.096)+$141,554*(1+0.096)^2/(0.096)+$180,760*(1+0.096)^1/(0.096)
FV = $644,406.10

Therefore, the best choice is A.

FV of Multiple Cash Flows: Stiglitz, Inc