Huggins Co has identified an investment project with the fol

Huggins Co. has identified an investment project with the following cash flows.

Year Cash Flow

1 $ 820

2 $1,130

3 $1,390

4 $1,525

If the discount rate is 10 percent, what is the present value of these cash flows?

Present value $ 3765,26 What is the present value at 16 percent?

Present value $ 3279.42 What is the present value at 25 percent?

Present value $ 2715.52

*These are my answers I want to know if I got them right for each year?

Solution

Answer 1) Present value if the discount rate is 10 percent

Answer 2) Present value if the discount rate is 16 percent

Answer 3) Present value if the discount rate is 25 percent

Year Cash flows Present value @ 10% (discount factor) Present value of Net Cash flows
1 820 0.909 745.38
2 1130 0.826 933.38
3 1390 0.751 1043.89
4 1525 0.683 1041.575
Total Present Value of Cash Inflows 3764.23
Huggins Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 820 2 $1,130 3 $1,390 4 $1,525 If the discount rate is 10 per

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