(SOLVED) Your consulting firm will produce cash flows of 100 000


Question Description:

$15

Your consulting firm will produce cash flows of $ 100,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 8%, and you anticipate inflation of about 3%.
a. What is the present value of your firm’s cash flows for years 1 through 5?
b. How would your answer to part (a) change if you anticipated no growth in cash flow?

Answer

$15