Using the following cash flows and reversion (cash flow from an income producing asset) and...
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Finance
Using the following cash flows and reversion (cash flow from an income producing asset) and its sale to another person, demonstrate your understanding of how to "discount" the cash flows and reversion. Do not use XLS or a calculator. By applying the formula 1/(1+i)^N discount each year of the cash flows and reversion using a discount rate of 10%. Then take a photo of your work product (again using pencil and paper) and post. Year 1 Year 2 Year 3 Year 4 Cash Flows $100,000 $110,000 ($5,000) $200,000 Reversion $975,000 Calculate the factor each year then multiply each factor by the yearly totals then sum the discounted cash flow and reversion and show the answer.
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