H & L Bark Company

Cash Flow Analysis

Purchase of Debarking Machine

Data:

Discount rate: 14%

END OF YEAR
1 2 3 4 5
Cash Flow $1,200 $2,000 $2,400 $1,900 $1,600

END OF YEAR
6 7 8 9 10
Cash Flow $1,400 $1,400 $1,400 $1,400 $1,400

Present value of the cash flows

1 $1,052.63
2 $1,538.94
3 $1,619.93
4 $1,124.95
5 $830.99
6 $637.82
7 $559.49
8 $490.78
9 $430.51
10 $377.64
Total $8,663.69