You want to start a food-truck business. It is expected to generate after-tax cash flows of $40,000 per year in the years 1 through 4 and $50,000 per year in the years 5 through 8.
If you discount these cash flows at an annual rate of 10%, what is the present value of your expected cash flows?
a. $285,288
b. $235,048
c. $167,943
d. $828,230