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McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $950            2 1,050            3 1,260            4 1,140            a. If the discount rate...

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Finance

McCann Co. has identified an investment project with thefollowing cash flows.

YearCash Flow
1$950          
21,050          
31,260          
41,140          
a.

If the discount rate is 9 percent, what is the present value ofthese cash flows?

b.

What is the present value at 18 percent?

c.What is the present value at 29 percent?

Answer & Explanation Solved by verified expert
4.2 Ratings (692 Votes)

Ans a) $ 3535.88

b) $ 2914.05

c) $ 2366.02

Year Project Cash Flows (i) DF@ 9% (ii) PV of Project A ( (i) * (ii) ) DF@ 18% (iii) PV of Project A ( (i) * (iii) ) DF@ 19% (iv) PV of Project A ( (i) * (iv) )
1 950 0.917                           871.56 0.847               805.08 0.775            736.43
2 1050 0.842                           883.76 0.718               754.09 0.601            630.97
3 1260 0.772                           972.95 0.609               766.87 0.466            586.95
4 1140 0.708                           807.60 0.516               588.00 0.361            411.67
NPV                       3,535.88 NPV            2,914.05 NPV        2,366.02

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Transcribed Image Text

McCann Co. has identified an investment project with thefollowing cash flows.YearCash Flow1$950          21,050          31,260          41,140          a.If the discount rate is 9 percent, what is the present value ofthese cash flows?b.What is the present value at 18 percent?c.What is the present value at 29 percent?

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