Answer:
Total present value= $4,369.14
Explanation:
Giving the following information:
Year Cash Flow
1 $1,130
2 $1,000
3 $1,510
4 $1,870
Discount rate= 9%
To calculate the present value, we need to use the following formula on each cash flow:
PV= Cf/(1+i)^n
PV1= 1,130/1.09= 1,036.70
PV2= 1,000/1.09^2= 841.68
PV3= 1,510/1.09^3= 1,166
PV4= 1,870/1.09^4= 1,324.76
Total present value= $4,369.14
