Respuesta :
Answer:
To calculate the present value of the cash flows, we can use the formula for the present value of an annuity:
PV = CF * [(1 - (1 + r)^-n) / r]
Where:
PV = Present Value
CF = Cash Flow per period
r = Interest rate per period
n = Number of periods
In this case, the cash flows start at $20,000 and increase by $2,000 each year for 10 years at an interest rate of 8%.
First, let's calculate the present value of each cash flow:
For the first year:
PV_year1 = $20,000 / (1 + 0.08)^1 = $18,518.52
For the second year:
PV_year2 = ($20,000 + $2,000) / (1 + 0.08)^2 = $18,086.42
For the third year:
PV_year3 = ($20,000 + 2*$2,000) / (1 + 0.08)^3 = $17,672.90
And so on, until the 10th year.
Next, we sum up all these present values to get the total present value:
PV_total = PV_year1 + PV_year2 + ... + PV_year10
You can use a financial calculator or spreadsheet software to calculate each year's present value and then sum them up, or you can do it manually.
