Ask Question
BusinessBusiness
5 May, 18:12

An investment will pay you $120 in one year and $200 in two years. If the interest rate is 4%, what is the present value of these cash flows?

+1
Answers (1)
  1. 5 May, 20:04
    0
    Present value = $300.29

    Explanation:

    Giving the following information:

    An investment will pay $120 in one year and $200 in two years. The interest rate is 4%.

    To calculate the present value we need to use the following formula:

    PV = FV / (1+i) ^n

    PV = present value

    FV = final value

    i = interest rate

    n = number of years

    PV1 = 120/1.04^1 = 115.38

    PV2 = 200/1.04^2 = 184.91

    Present value = $300.29
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “An investment will pay you $120 in one year and $200 in two years. If the interest rate is 4%, what is the present value of these cash ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
In his spare time, Fred likes to restore old furniture and sell it to his friends. He is a lawyer by trade. During 2017, he sells $500 worth of furniture and has $21,000 worth of expenses. Which one of the following is true? a.
Answers (1)
Hockey Accessories Corporation manufactured 21 comma 600 duffle bags during March. The following fixed overhead data pertain to March: Actual Static Budget Production 21 comma 600 units 22 comma 000 units Machineminushours 1 comma 150 hours 2 comma
Answers (1)
If the economy is experiencing excess demand that is causing inflation, the inflationary pressures can be eliminated by reducing government spending by less than the amount of excess demand. A. TrueB. False
Answers (1)
An expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period is called:A. Manufacturing overhead. B.
Answers (1)
True or false? a 1991 study found that 91 percent of 6-year-olds recognized joe camel, the same percentage that recognized the mickey mouse logo of the disney channel.
Answers (1)
New Questions in Business
A building acquired at the beginning of the year at a cost of $1,375,000 has an estimated residual value of $250,000 and an estimated useful life of 40 years.
Answers (1)
Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,300 pounds) has the following standards: Standard Quantity Standard Price Whole tomatoes 3,800 lbs.
Answers (1)
During the 1800s, there was an increase in nationalism among European countries, and many people advocated for countries being set up along ethnic or linguistic lines.
Answers (1)
If will's print shop competes in a perfectly competitive market and he charges $10 per printing job, what is the marginal revenue of his 3rd print job?
Answers (1)
A nationwide restaurant chain that varies its menu based on its location is an example of what kind of segmentation
Answers (1)
Home » Business » An investment will pay you $120 in one year and $200 in two years. If the interest rate is 4%, what is the present value of these cash flows?
Sign Up Forgot Password?