Huggins Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 840 2 1,170 3 1,430 4 1,575 If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 16 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 25 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ Solution present value formula is PV=FV/(1+r)^n where r = rate of discount and n is time periodCash flowAt 9%At 16%At 25%PV Factorpresent valuePV Factorpresent valuePV Factorpresent value18400.92772.800.86722.400.8672.00211700.84982.800.74865.800.64748.80314300.77110 1.100.64915.200.51729.30415750.711118.250.55866.250.41645.75Total3974.953369.652795.8 5.

1. Huggins Co. has identified an investment project with the following cash flows.
Year Cash Flow
1 $ 840
2 1,170
3 1,430
4 1,575
If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Present value $
What is the present value at 16 percent? (Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)
Present value $
What is the present value at 25 percent? (Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)
Present value $
Solution
present value formula is PV=FV/(1+r)^n where r = rate of discount and n is time periodCash
flowAt 9%At 16%At 25%PV Factorpresent valuePV Factorpresent valuePV Factorpresent
value18400.92772.800.86722.400.8672.00211700.84982.800.74865.800.64748.80314300.77110
1.100.64915.200.51729.30415750.711118.250.55866.250.41645.75Total3974.953369.652795.8
5