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General Motors Corporation has invested in a project which is expected to payback the following cash flows...

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Question

Accounting

General Motors Corporation has invested in a project which isexpected to payback the following cash

flows over the next four years. What is the present value ofthese cashflow if the discount rate is 15%?

Year

Cashflow

1

$1256

2

$1100

3

$925

4

$730

Answer & Explanation Solved by verified expert
4.0 Ratings (439 Votes)

Year Cash Flow Present Value factor @ 15% Present Value
(i) (ii) (i) X (ii)
1 $                    1,256 0.86957 $       1,092
2 $                    1,100 0.75614 $           832
3 $                        925 0.65752 $           608
4 $                        730 0.57175 $           417
Total Present Value of cash Inflows = $       2,950
Therefore,
Total Present Value of cash Inflows is $2,950

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