Answer:
$10,659.13
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow each year from year 0 - 3 = 0
Cash flow in year 4 = $13000
I = 5%
Present value = $10,659.13
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
