Answered

Welcome to Westonci.ca, the place where your questions are answered by a community of knowledgeable contributors. Get quick and reliable solutions to your questions from a community of seasoned experts on our user-friendly platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

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

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.