Industries runs a small manufacturing operation

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Phillips Industries runs a small manufacturing operation. For this fiscal year, it expects real net cash flows of $205,000. The company is an ongoing operation, but it expects competitive pressures to erode its real net cash flows at 4 percent per year in perpetuity. The appropriate real discount rate for the company is 11 percent. All net cash flows are received at year-end. What is the present value of the net cash flows from the company’s operations? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Present value of cash flows=

Reference no: EM131315778

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