Q. Trigen Corp. management will invest cash flows of 1,072,731, 379,554, 1,297,437, 818,400, 1,239,644, and 1,617,848 in research and development over the next six years. If the appropriate interest rate is percent, what is the future value of these investment cash flows six years from today

Answer

value is assumed at the end of Year -6 or begining of Year -7. It is also assumed that Cash flows are being incurred at the end of each year.

. Cash flow of Year -1 has been taken for 5 years for future value purpose.

Solution is given below:

Year Cashflow Factor Future Value at Year -6 end

Year 1 1,128,358 X (16.3%)5 1,531,487

Year 2 1,047,490 X (16.3%)4 1,337,467

Year 3 1,427,185 X (16.3%)3 1,714,273

Year 4 818,400 X (16.3%)2 924,767

Year 5...