Problem 5-1 Present Value and Multiple Cash Flows [LO 1] Mendez Company has identified an investment project with the following cash flows. Year 1 Cash Flow $1,010 820 1,450 1,810 3 4 a. If the discount rate is 12 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the present value at 15 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What is the present value at 21 percent? Note: Do not round intermediate calculations and round your nswer to 2 decimal places, e.g., 32.16. a. Present value at 12 percent b. Present value at 15 percent c. Present value at 21 percent 4

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Problem 5-1 Present Value and Multiple Cash Flows [LO 1]
Mendez Company has identified an investment project with the following cash flows.
Year
1
2
3
4
Cash Flow
$ 1,010
820
1,450
1,810
a. If the discount rate is 12 percent, what is the present value of these cash flows?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. What is the present value at 15 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
c. What is the present value at 21 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
a. Present value at 12 percent
b. Present value at 15 percent
c. Present value at 21 percent
4
Transcribed Image Text:Problem 5-1 Present Value and Multiple Cash Flows [LO 1] Mendez Company has identified an investment project with the following cash flows. Year 1 2 3 4 Cash Flow $ 1,010 820 1,450 1,810 a. If the discount rate is 12 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the present value at 15 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What is the present value at 21 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Present value at 12 percent b. Present value at 15 percent c. Present value at 21 percent 4
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