[Depp89]

There is an opportunity to invest in a 2 year project with cash flows of $100,000 in year one and $200,000 in year two. The required rate of return is 20% and the question wants to know the maximum amount you should be willing to initially invest

The answer is $222,100 but I can't figure out how they got it using the present value interest factors:confused:

[ROLCAM]

The actual answer is as follows :- $222,222.22

First Part

100,000.00/1.2 83,333.33 83,333.33

Second Part

200,000.00/1.2 166,666.67

166,666.67/1.2 138,888.89 138,888.89

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TOTAL TWO PARTS ********************222,222.22

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[asmaaok]

What is the initial investment if the amount continuous money flow over 30 years at an interest rate of 95 compounded continuously will be 40000