$974,050 Jennifer So that is the present-day value of expected cash flow 3 years from now? Fanny Alvarado Yes, Monster expects a 10.1% annual return on their investments, so we must discount the future cash flows by 10.1% for every year in the future they occur. Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return = 10.1% $-3,500,000 Year Cash Flow Discounted Cash Flow $-3,500,000 1 $1,000,000 What is the present value of all future cash flows? Note: do not include value of Year 0 cash flow. 2 $1,200,000 3 $1,300,000 4 $900,000 5 $1,000,000 $908,265 $989,935 1 $974,050 $612,482 $618,107