Time Value of Money: Basics

(e) A proposed investment will provide cash flows of $50,000, $10,000, and $7,000 at the end of Years 1, 2, and 3, respectively. Using a discount rate of 20 percent, determine the present value of these cash flows. Year 1 $ Answer = 41666.67 Year 2 $ Answer = ??? Year 3 $ Answer = ???

(f) Find the present value of an investment that will pay $7,000 at the end of Years 10, 11, and 12. Use a discount rate of 12 percent.