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Find the future value at the end of year 3 of the following stream of cash...

Find the future value at the end of year 3 of the following stream of cash flows received at the end of each year, assuming the firm can earn 8 percent on its investments.

Year Amount
1 $10,000
2 16,000
3 19,000


A. $45,000

B. $53,396

C. $47,944

D. $56,690

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Answer #1

Note : 1) Question said cash flows recieved at year ends.

2) Question asked for 'future value'


solution:

10000(1.08)^2 + 16000(1.08)^1 + 19000 = $47,944

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