Homework Answers
Answer is option (a). $15617
Calculation.
Present value is calculated below.
= Cash flow year 1 * 1/1.04 + cash flow year 2 * 1/(1.04)^2 + cash flow year 3 * 1/ (1.04)^3
= 4000* 0.9615 + 6000 * 0.9246 + 7000* 0.8890
$15617 answer
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