McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $950 2 1,050 3 1,260 4 1,140 a. If the discount rate...

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Finance

McCann Co. has identified an investment project with thefollowing cash flows.
Year Cash Flow
1 $950
2 1,050
3 1,260
4 1,140
a.
If the discount rate is 9 percent, what is the present value ofthese cash flows?
b.
What is the present value at 18 percent?
c. What is the present value at 29 percent?

Answer & Explanation Solved by verified expert

4.2 Ratings (692 Votes)

Ans a) $ 3535.88

b) $ 2914.05

c) $ 2366.02

Year	Project Cash Flows (i)		DF@ 9% (ii)	PV of Project A ( (i) * (ii) )	DF@ 18% (iii)	PV of Project A ( (i) * (iii) )	DF@ 19% (iv)	PV of Project A ( (i) * (iv) )

1	950		0.917	871.56	0.847	805.08	0.775	736.43
2	1050		0.842	883.76	0.718	754.09	0.601	630.97
3	1260		0.772	972.95	0.609	766.87	0.466	586.95
4	1140		0.708	807.60	0.516	588.00	0.361	411.67
		NPV		3,535.88	NPV	2,914.05	NPV	2,366.02

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Transcribed Image Text

McCann Co. has identified an investment project with thefollowing cash flows.YearCash Flow1$950 21,050 31,260 41,140 a.If the discount rate is 9 percent, what is the present value ofthese cash flows?b.What is the present value at 18 percent?c.What is the present value at 29 percent?


a.	If the discount rate is 9 percent, what is the present value ofthese cash flows?