Consider an investment that will yield uneven cash flows over the next five years. The cash flows are expected to be as follows:

• Year 1: $2,000
• Year 2: $3,500
• Year 3: $5,000
• Year 4: $4,500
• Year 5: $6,000

The required rate of return for this investment is 8%. What is the present value (PV) of the investment, rounding your answer to the nearest dollar?

To calculate the present value of uneven cash flows, the formula is:

$$PV = \sum_{t=1}^{n} \frac{CF_t}{(1 + r)^t}$$

where:

• $$PV$$ = Present Value
• $$CF_t$$ = Cash Flow in year $$t$$
• $$r$$ = Discount rate (required rate of return)
• $$n$$ = Total number of periods