Increase in the general level of prices

Reference no: EM131015812

Your consulting firm will produce cash flows of $180,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.4%, and you anticipate inflation of about 1.4%.

a.	What is the present value of your firm's cash flows for years 1 through 4? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

mce_markernbsp;

b.	How would your answer to (a) change if you anticipated no growth in cash flow? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131015812

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