What is the present value of the following cash flows given a discount rate of 6%?

Year 2 4 5 Cash Flow $307 $411 $109 (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Use this as an example to solve: What is the present value of the following cash flows given a discount rate of 7%?

Year 2 4 5 Cash Flow $308 $418 $127 (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Correct!

Correct Answer 678.46 First find the present value PV0 of each individual cash flow CFt, by discounting it for the number of years t that it arrives in the future.

PV0 = CFt / (1+r)t

Then add their present values together.