Write the solution formula that is necessary to find equivalent of the cash flow given below to calculate P

Economics Dec 06, 2020

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

Expert Solution

Year	Cashflows	PVF @ 15%	PV
N	A	B=1/1.15^N	*C=AB**
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

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