What is present value of the investment

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Reference no: EM131880991

1. Assume a project will produce cash flows of $31,500, $42,700, $37,600 and $26,900 at the end of Years 5 to 8, respectively. If the discount rate is 10.7%, what is the current value of these cash flows?

2. You are considering a property that is leased for 15 years. As the lessor you would receive $27,000 per year. At the end of the period you will receive a lump sum payment of $87,500 and the property reverts to the lessee. At an interest rate of 4%, what is the present value of the investment?

Reference no: EM131880991

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