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Homework answers / question archive / Write the solution formula that is necessary to find equivalent of the cash flow given below to calculate P
Write the solution formula that is necessary to find equivalent of the cash flow given below to calculate P. $2,000 $200 PO ? $100 $100 $100 $100 $100 i = 15%/year 8 (EOY) S500 $1,000
| Year | Cashflows | PVF @ 15% | PV |
| N | A | B=1/1.15^N | C=A*B |
| 1 | -1,000 | 0.870 | -869.57 |
| 2 | 100 | 0.756 | 75.61 |
| 3 | 100 | 0.658 | 65.75 |
| 4 | 100 | 0.572 | 57.18 |
| 5 | 200 | 0.497 | 99.44 |
| 6 | 100 | 0.432 | 43.23 |
| 7 | 100 | 0.376 | 37.59 |
| 8 | -500 | 0.327 | -163.45 |
| 9 | 2,000 | 0.284 | 568.52 |
| PV (Sum of C) | -85.69 |
As present value of cashflows is -85.69 therefore this is resulting in cash outflow. Hence value of P is -85.69
