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Cash flow diagrams are used to illustrate cash inflow and outflows over a period of time. You can learn more about them here:

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Answer #1

Present value of cash flows = Future cash flow/(1+Discount rate)^Number of Years

= 500/(1.08)^2 + 500/(1.08)^3 + 1500/(1.08)^4 + 1500/(1.08)^5

= $2,949.005

i.e. $2,949

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