You are scheduled to receive a $490 cash flow in one year, a $790 cash flow in two years, and pay a $390 payment in three years. If interest rates are 8 percent per year, what is the combined present value of these cash flows?

a. $890.00
b. $1,280.00
c. $1,440.60
d. $821.41

The answer is c. $1,440.60

Explanation:

Present value = PV of cash flows

PV = $490(1.08^-1) +  $790( 1.08^-2) +  $390(1.08^-3)

PV = $1,440.5959 =  $1,440.60

Energy of Electrons in Atomic Orbitals

Electrons with the lowest energy are found closest to the nucleus, where the attractive force of the positively charged nucleus is the greatest. Electrons that have higher energy are found further away.