# A project is expected to produce cash flows of $48,000, $39,000, and $15,000 over the next three...

## Question:

A project is expected to produce cash flows of $48,000, $39,000, and $15,000 over the next three years, respectively. After three years, the project will be worthless. What is the present value of this project if the applicable discount rate is 15.25 percent?

## Present Value:

Present value is the calculation of the current value of a lump sum amount or a stream of cash flow that will be received in the future. It is an important concept that is used in personal finance as well as capital budgeting.

## Answer and Explanation: 1

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View this answer{eq}Present \ value \ = \ \dfrac{Cash \ flow}{\left ( 1 \ + \ Discount \ rate \right )^1} \ + \ \dfrac{Cash \ flow}{\left ( 1 \ + \ Discount \ rate...

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Chapter 8 / Lesson 3Learn how to find present value of annuity using the formula and see its derivation. Study its examples and see a difference between Ordinary Annuity and Annuity Due.

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