A company expects to receive the following cash flows $2,000 for the first ten years and then $3,000 for the next ten years. The discount rate is 10.0%. What is the present value of this 20-year cash flow?

A company expects to receive the following cash flows $2,000 for the first ten years and then $3,000 for the next ten years. The discount rate is 10.0%. What is the present value of this 20-year cash flow?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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A company expects to receive the following cash flows $2,000 for the first ten years and
then $3,000 for the next ten years. The discount rate is 10.0%. What is the present value
of this 20-year cash flow?
7.

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