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On Q3, Chapter 14 – when discounting the amount of 90 000 at 8 % for 3 years, should it be 90 000 *1/1.08 *1/1.08 *1/1.08 = 71 445
And in the answer is written 77 312. I don`t understand how to reach this amount. Could you help me, please?It’s an annual cash flow of 30,000
It’s not a one-off flow of 90,000 after 3 years
Discount 30,000 for 1 year and make a note of the amount
Discount 30,000 for 2 years and make a note of the amount
Discount 30,000 for 3 years and make a note of the amount
Add up all three amounts that you have made a note of
What do you get?
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