Westonci.ca offers quick and accurate answers to your questions. Join our community and get the insights you need today. Ask your questions and receive detailed answers from professionals with extensive experience in various fields. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.


A project produces a cash flow of $492 in year 1, $197 in year 2, and $857 in year 3. If the cost of capital is 14.5%, what is the project’s PV?


Sagot :

In year 1 : 492/100×14.5=71.34; 492-71.4=420.66 ; year 2 :197/100×14.5=28.565; 197 - 28.565=128.435; Year 3 : 857/100×14.5=124.256; 857 - 124.256=732.735; Pv = 420.66 + 128.435 + 732.735 =1281.83