What is the present value of the following cash flow? $1,100 $700 (+) 4% 5% 6% 7% (-) $400 Sedo Click here to access the TVM Factor Table calculator. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 4

What is the present value of the following cash flow? $1,100 $700 (+) 4% 5% 6% 7% (-) $400 Sedo Click here to access the TVM Factor Table calculator. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 4

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 2MC

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

What is the present value of the following cash flow?
$1,100
$700
(+)
4%
6%
7%
3
4
()
$400
Click here to access the TVM Factor Table calculator.
Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 24.

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