Answer:
$27,965.4393
Explanation:
Given:
Cash flow for first year (C1) = $6,200
Cash flow for second year (C2) = 116,200
Cash flow for third year (C3) = $17,400
Rate of return = 10% = 10/100 = 0.1
Computation of total price :
Total Price = [tex]\frac{C1}{(1+r)^1} +\frac{C2}{(1+r)^2} +\frac{C3}{(1+r)^3}[/tex]
[tex]Total\ price = \frac{6,200}{(1+0.1)^1} +\frac{11,200}{(1+0.1)^2} +\frac{17,400}{(1+0.1)^3}\\\\Total\ price = \frac{6,200}{(1.1)^1} +\frac{11,200}{(1.1)^2} +\frac{17,400}{(1.1)^3}\\\\Total\ price = \frac{6,200}{(1.1)} +\frac{11,200}{(1.21)} +\frac{17,400}{(1.331)}\\\\Total\ price = 5,636.36364 + 9256.19835 +13,072.8775\\\\Total\ price = 27,965.4393\\\\[/tex]
Therefore, Marko Inc. will pay $27,965.4393
