Wells, Inc., has identified an investment project with the following cash flows. Cash Flow $ 970 1,200 1,420 2,160 Year 1 2 3 4 a. If the discount rate is 7 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the future value at an interest rate of 13 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the future value at an interest rate of 22 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Q. 2

Wells, Inc., has identified an investment project with the following cash flows.
Cash Flow
$ 970
1,200
1,420
2,160
Year
1
2
3
4
a. If the discount rate is 7 percent, what is the future value of these cash flows in Year 4?
(Do not round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
b. What is the future value at an interest rate of 13 percent? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the future value at an interest rate of 22 percent? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
a. Future value at 7 percent
b. Future value at 13 percent
Future value at 22 percent
С.
Transcribed Image Text:Wells, Inc., has identified an investment project with the following cash flows. Cash Flow $ 970 1,200 1,420 2,160 Year 1 2 3 4 a. If the discount rate is 7 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the future value at an interest rate of 13 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the future value at an interest rate of 22 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Future value at 7 percent b. Future value at 13 percent Future value at 22 percent С.
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