Q5: Find the present values of the following cash flow streams. The appropriate interest rate is...

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Q5: Find the present values of the following cash flow streams. The appropriate interest rate is...

Q5: Find the present values of the following cash flow streams. The appropriate interest rate is 6%.

Year	Cash Stream A
1	$100
2	400
3	400
4	400
5	300

business finance

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Answer 1

Answer #1

Present value=cash flows*Present value of discounting factor(rate%,time period)

=100/1.06+400/1.06^2+400/1.06^3+400/1.06^4+300/1.06^5

which is equal to

=$1327.20(Approx).

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Answer 2

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