Answered: Your firm expects to receive a $40,000…

Your firm expects to receive a $40,000 payment from a supplier in 40 days. What is the present value of this cash inflow? Assume an annual discount rate of 4%. Use simple interest.

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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Question

Your firm expects to receive a $40,000 payment from a supplier in 40 days. What is the present value of this cash inflow? Assume an annual discount rate of 4%. Use simple interest.

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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