A) What is the present worth factor? (Use graphs and equations) B) Calculate the present worth
of the cash flow shown in the accompanying diagram. using at most three kinds of interest
factors at 10% interest compounded annually.
Solution
Hi,
Please find the correct answer as follows:
Hence, the net present worth is $-152.62
Year Cashflow Present Value
1 -250 -227.27
2 0 0.00
3 40 30.05
4 60 40.98
5 80 49.67
6 -20 -11.29
7 -20 -10.26
8 -20 -9.33
9 -20 -8.48
10 0 0.00
11 -10 -3.50
12 -10 -3.19
Net Present Worth -152.62