Present Value of Uneven Cash Flows Calculation

An investor is evaluating a series of uneven cash flows from an investment project. The cash flows are projected as follows:

• Year 0: $1,500
• Year 1: $2,000
• Year 2: $2,500
• Year 3: $3,000
• Year 4: $1,000

The investor requires a discount rate of 8%. What is the present value (PV) of these cash flows?

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

$$ PV =\frac{CF_0}{(1 + r)^0} +\frac{CF_1}{(1 + r)^1} +\frac{CF_2}{(1 + r)^2} +\frac{CF_3}{(1 + r)^3} +\frac{CF_4}{(1 + r)^4} $$