Some of the following future cash flows have been expressed in then-current (future) dollars and othÂers in CV dollars. Use an interest rate of 10% per year and an inflation rate of 6% per year. (a) Find the present worth. (b) Use a spreadsheet to find the PW value using one NPV function with all cash flows expressed as future dollars.
 FIGURE 1.png)
(a) Use if for future dollars and i for CV dollars
if = 0.10 + 0.06 + (0.10)(0.06) = 0.166 (16.6%)
PW = 16,000 + 40,000(P/F,16.6%,3) + 12,000(P/F,16.6%,4) + 26,000(P/F,10%,7)
= 16,000 + 40,000(0.63082) + 12,000(0.54101) + 26,000(0.51316)
= $61,067
(b) Convert CF in year 7 to future dollars and develop NPV function
 ANSWER.png)
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