Global Shippers Inc. has forecast earnings of $1,233,600, $1,345,900, and $1,455,650 for the next three years. What is the future value of these earnings if the firm's opportunity cost is 13 percent?

Given:

Annuity amount in year 1, A1 = $1,233,600

Annuity amount in year 2, A2 = $1,345,900

Annuity amount in year 3, A3 = $1,455,650

Rate, r = 13%

The equation for the future value of an ordinary annuity is the sum of the geometric sequence:

Future value, FV = A (1 + r) ^0 + A (1 + r) ^1 + ... + A (1 + r) ^n-1

FVOA = A3 (1 + r) ^0 + A2 (1 + r) ^1 + A1 (1 + r) ^2

Inputting values,

= $1,233,600 * 1.13^2 + $1,345,900 * 1.13^1 + $1,455,650 * 1.13^0

= $4551700.84

= $4551701