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    Project Cash Flow Analysis

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    Please verify that I did the problem correctly. If I didn't, please show me how to do it.

    Image a is the expected after-tax cash flow for a project and the expected annual general inflaction rate during the project period.

    Thank you.

    © BrainMass Inc. brainmass.com October 9, 2019, 5:22 pm ad1c9bdddf


    Solution Preview

    From what you posted here, you answered correctly questions 1 and 3, but question 2 is incorrect.

    The mistake was to discount (convert into equivalent constant dollars) the cash flows from year 2 and year 3 without taking in account the inflation for previous years. For example, you said that the discounted value of $26,000 in year 3 is:

    26000 * (1.081)^(-3)

    You're ...

    Solution Summary

    Project cash flow analysis for after-tax projects are determined. The expected annual general inflaction rate during the project period is examined.