Time Value of Money- Deli Case
The answer is already given, so step by step on arriving on that answer is required
Christina hopes to open a Deli in 2015.The initial investment will be $85,000. She expects that that the Deli will generate the positive cashflow as indicated below.If she canborrow money at 7% per year, what willbe theNet Present Value? Use 7% as the discount rate.
| Year |
Cash Flow |
| 2016 |
$22,000 |
| 2017 |
$24,000 |
| 2018 |
$29,000 |
| 2019 |
$30,000 |
| 2020 |
$31,000 |
| 2021 |
$27,000 |
| 2022 |
$22,000 |
| 2023 |
$15,000 |
| 2024 |
$12,000 |
| Answer: |
$72,134.42
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