PV=C r 1(1+r) n Where: PV = present value of the investment C = annual cash flow r = required return or discount rate per period n = number of periods Given: Annual cash flow ( C) = $5,100 Required return ( r) = 5% or 0.05 Number of periods ( n) = 10 years Now, let's plug in the values into the formula: = 5100 1 ( 1 + 0.05 ) 10 0.05 PV=5100 0.05 1(1+0.05) 10 = 5100 1 ( 1.05 ) 10 0.05 PV=5100 0.05 1(1.05) 10 = 5100 1 0.613913 0.05 PV=5100 0.05 10.613913 = 5100 0.386087 0.05 PV=5100 0.05 0.386087 = 5100 7.72174 PV=51007.72174 39380.85 PV39380.85