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b. How much is the tidy sum of money that awaits Bok at the end of four years? 3-A24 Time Value, uneven cash flows. Max
b. How much is the tidy sum of money that awaits Bok at the end of four years? 3-A24 Time Value, uneven cash flows. Max Bok was in the business of mining graphite rocks in the hill sides of Bukidnon. Due to erratic weather, the condition of equipment and limited availability of skilled labor, he expected the following pattern of net cash flows from his business. YEAR NET CASH FLOWS (Pesos) 0 (40,000) 1 25,000 2 40,000 3 (10,000) 4 30,000 Bok would like to know whether the cash flows justified his going on with the business. Alternatively, he could invest the P40,000 he held now in a time deposit account to yield 12 percent after tax. Bok was hoping to retire with a tidy sum of money at the end of four years. c. a. What is the present value of the business' cash flows? Determine the equal amount of annual cash flows that is equivalent to the above cash flow. d. Should Bok pursue the business or deposit his money in the bank
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