Explore BrainMass

Explore BrainMass

    Calculating expected cash flow

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Mountain View Hospital has purchased new lab equipment for $146,460. The equipment is expected to last for three years and to provide cash inflows as follows:

    Year 1 $47,000
    Year 2 $64,000
    Year 3 ?

    Required :
    Assuming that the equipment will yield exactly a 14% rate of return, what is the expected cash inflow for Year 3?

    © BrainMass Inc. brainmass.com November 24, 2021, 2:01 pm ad1c9bdddf


    Solution Preview


    PV of cash outflow in at the end of 0 year=-146460

    PV of cash in flow at the end of 1 year=FV*PV factor at n=1 and r=0.14

    Solution Summary

    The solution describes the steps for calculating expected cash flow of third year for given yield.