To find the value of the cash flows associated with this transaction, we need to calculate the present value (PV) of each cash flow using the given discount rate of 14.10% per year.

The formula for calculating the present value of a future cash flow is:

$PV = \frac{C}{(1 + r)^t}$

Where:

• $C$ = the future cash flow
• $r$ = the discount rate (14.10% = 0.141)
• $t$ = the number of years until the cash flow occurs

Step-by-step calculations:

1. Cash rebate in 3 years (receive $4,100): $PV = \frac{4100}{(1 + 0.141)^3}$

2. Payment in 8 years (pay $26,500): $PV = \frac{-26500}{(1 + 0.141)^8}$

3. Cash rebate in 12 years (receive $4,200): $PV = \frac{4200}{(1 + 0.141)^12}$

4. Payment in 14 years (pay $4,400): $PV = \frac{-4400}{(1 + 0.141)^14}$

Let me calculate the present value for each of these cash flows.The present values of the individual cash flows are:

1. Cash rebate in 3 years ($4,100): $2,760
2. Payment in 8 years (-$26,500): -$9,225
3. Cash rebate in 12 years ($4,200): $863
4. Payment in 14 years (-$4,400): -$694

When these present values are summed up, the total present value of the cash flows is - $6,296.

This means the overall value of the transaction is negative, indicating that in today's terms, you are paying more than you are receiving.

Would you like more details or have any questions?

Here are 5 related questions:

1. What is the importance of calculating the present value in financial decisions?
2. How does the discount rate affect the present value of cash flows?
3. What would happen if the discount rate was lower, say 10%?
4. How do these cash flows compare in value at different time periods?
5. Can you use the present value to compare different investment opportunities?

Tip: The further into the future a cash flow occurs, the smaller its present value will be when discounted.