Determine the first year of present value of cash flow

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Reference no: EM131567960

Company A sells machinery to Company B.

Company B agrees to pay Company A $200,000 at the end of each of the next 4 years, with discount rate 5%.

Instruction:

[1] Provide a clear calculation to determine the first year of Present value of cash flow

[2] provide a clear calculation for each year cash payment reduction for 4 years.

[3] Please provide an explanation toward your calculation.

Reference no: EM131567960

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