(Answered) Present value of cash returns

Finance

Problem: XYZ Computer Company has developed a new line of desktop computers. It is estimated that the cash returns generated by the new product line will be $600,000 per year for the next four years, and then $400,000 per year for two years after that (the cash returns occur at the end of each year).

Required:

At a 5% interest rate, what is the present value of these cash returns?

a. $3,105,281

b. $2,516,793

c. $2,739,467

d. $3,934,57

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