Question

Fuente, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,100 2 1,330 3 1,550 4 2,290 a. If the discount rate is 6 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the discount rate is 14 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. If the discount rate is 21 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Year Cash Flow

1 $ 1,100

2 1,330

3 1,550

4 2,290

A) i=6%

FV= PV*(1+i)^n

1= 1100*1.06^4= 1388.73

2=1330*1.06^3= 1584.05

3= 1550*1.06^2= 1742.58

4= 2290*1.06= 2427.4

Total= $7,142.76

B) i= 14%

FV= $8,453.29

C) i= 21%

FV= $9,754.38