The Engineering Economics Finance Company (EEFC) plans to receive $900,000 next year from a certain investment, with increases of 5% per year. If N = 5 years and the interest rate is 12%, determine the present worth of the cash flows. Show calculations.
Please provide in both Word and Excel.
The formula to calculate is:
Amount / (1+i)^n , where
i = interest rate
n = term or period
This response provides the calculations for determining the present worth of cash flows for the Engineering Economics Finance Company.