Math Problem Statement

You just bought equipment from Orange Ocean Furniture. You will receive a cash rebate of $4,100 from Orange Ocean Furniture in 3 years, pay $26,500 to Orange Ocean Furniture in 8 years, receive a cash rebate of $4,200 from Orange Ocean Furniture in 12 years, and pay $4,400 to Orange Ocean Furniture in 14 years. The discount rate is 14.10 percent per year. What is the value of the cash flows associated with this transaction? Round to the nearest dollar for your answer.

Solution

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Math Problem Analysis

Mathematical Concepts

Present Value
Discount Rate
Cash Flow Analysis

Formulas

PV = C / (1 + r)^t

Theorems

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Suitable Grade Level

College/University Level (Finance, Business Mathematics)