Phillips Industries runs a small manufacturing operation. For this fiscal year, it expects

real cash flows of $$194,000.$ The company is an ongoing operation, but it expects

competitive pressures to erode its real cash flows at $3$ percent per year in perpetuity.

The appropriate real discount rate for the company is $12$ percent. All cash flows are

received at year$-$end. What is the present value of the cash flows from the company's

operations? $($Do not round intermediate calculations and round your answer to $2$

decimal places, e$.$g$.,32\mathrm{.}16.)$

Present value of cash flows