What will be the total value of the inflows after five years

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Turner Video will invest $92,500 in a project. The firm's cost of capital is 11 percent. The investment will provide the following inflows. Use Appendix A.

Year Inflow
1 $ 32,000
2 34,000
3 35,000
4 40,000
5 38,000

(a) If the reinvestment assumption of the net present value method is used, what will be the total value of the inflows after five years? (Assume the inflows come at the end of each year.) (Round "FV Factor" to 3 decimal places, intermediate and final answers to the nearest whole dollar amount.Omit the "tiny_mce_markerquot; sign in your response.)

Total value of inflows $

(b) If the firm is able to earn 7 percent on reinvested funds, what will be the total value of the inflows after five years? (Round "FV Factor" to 3 decimal places, intermediate and final answers to the nearest whole dollar amount. Omit the "tiny_mce_markerquot; sign in your response.)

Total value of inflows $

 

Reference no: EM13294068

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