Ask Question
10 October, 08:06

Cullumber, Inc., management expects the company to earn cash flows of $12,900, $16,300, $18,600, and $19,800 over the next four years. If the company uses an 10 percent discount rate, what is the future value of these cash flows at the end of year 4?

+2
Answers (1)
  1. 10 October, 11:30
    0
    Total = $77,153

    Explanation:

    Giving the following information:

    Cullumber, Inc., management expects the company to earn cash flows of $12,900, $16,300, $18,600, and $19,800 over the next four years.

    The discount rate is 10%.

    To calculate the future value, we need to use the following formula for each cash flow:

    FV = PV * (1+i) ^n

    Cf1 = 12,900*1.1^3 = 17,169.9

    Cf2 = 16,300*1.1^2 = 19,723

    Cf3 = 18,600*1.1 = 20,460

    Cf4 = 19,800

    Total = $77,153
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Cullumber, Inc., management expects the company to earn cash flows of $12,900, $16,300, $18,600, and $19,800 over the next four years. If ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers