Answered

Find the best solutions to your questions at Westonci.ca, the premier Q&A platform with a community of knowledgeable experts. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Scottie Barnes has an investment that will pay him $6,400, $6,450, $7,225, and $7,500 over the next four years. If his opportunity cost is 10 percent, what is the future value of the cash flows he will receive

Sagot :

facundobuzzetti

Answer:

Total FV= $34,947.44

Explanation:

Giving the following information:

Cash flows:

1= $6,400

2= $6,450

3= $7,225

4= $7,500

Opportunity cost= 10%

To calculate the future value of the cash flows, we need to use the following formula on each cash flow:

FV= Cf*(1+i)^n

i= opportunity cost

FV1= 6,400*1.1^4= 9,370.24

FV2= 6,450*1.1^3= 8,584.95

FV3= 7,225*1.1^2= 8,742.25

FV4= 7,500*1.1= 8,250

Total FV= $34,947.44

Thank you for visiting our platform. We hope you found the answers you were looking for. Come back anytime you need more information. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.