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    Calculating expected cash flow

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    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
    https://brainmass.com/business/statement-of-cash-flows/calculating-expected-cash-flow-214150

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    Solution:

    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.

    $2.49

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