Capstone Investments is considering a project that will produce cash inflows of $11,000 in year 1, $24,000 in year 2, and $36,000 in year 3. What is the present value of these cash inflows if the company assigns the project a discount rate of 12 percent?

Total = $54,578.17

Explanation:

Giving the following information:

Capstone Investments is considering a project that will produce cash inflows of $11,000 in year 1, $24,000 in year 2, and $36,000 in year 3.

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

PV = FV / (1+i) ^n

Year 1 = 11,000/1.12 = 9,821.43

Year 2 = 24,000/1.12^2 = 19,132.65

Year 3 = 36,000/1.12^3 = 25,624.09

Total = $54,578.17