To make the valuation process more realistic youve decided


To make the valuation process more realistic, you’ve decided to switch the valuation method for a project to a “mid-year” approach. Instead of assuming each cashflow is realized at the end of the year, the technique assumes it occurs exactly half-way through the year. Prior to the change, the project had an initial cashflow of $100k occur at time 1. Each subsequent cashflow of the project increased by $50k, with the final cashflow of $300k occurring at the end of year 5. Using the old method, you computed the PV of the cashflows as $767.89k when assuming a discount rate of 8%. What is the PV of the cashflows using mid-year valuation? Please list out all the formulas involved for this question.

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Financial Management: To make the valuation process more realistic youve decided
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