1: Present value of Stream A = 38383.35
2: Present value of stream B = 48760.07
3: Option B
A is false since PV of stream A is lesser.
B is TRUE since PV of stream A is lower than that of Stream B. The difference is that the negative cash outflows occur initially in Stream A than in B.
C and D are false since the PV of stream A is lower than B.
WORKINGS
please help and answer each part!! ill give feedback! Present value Mixed streams Consider the mixed...
Please help with the following question: Present valueMixed streams Consider the mixed streams of cash flows shown in the following table, a. Find the present value of each stream using a 5% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $50,000 in each case. Is there some discount rate at which the present values of the two streams would be equal? a. The present value of the cash flows...
Present value: Mixed streams Consider the mixed streams of cash flows shown in the following table. Cash flow stream Year $50,000 $10,000 20,000 30,000 30,000 20,00040,000 -50,000 Totals $50,000 $50,000 0 40,000 4 10,000 a. Find the present value of each stream using a 5% discount rate. b. Compare the calculated present values and discuss them in light of the undis- flows totaling $50,000 in each case. Is there some discount rate at counted cash which the present values of...
CHAPTER 5 – The Value of MoneyP5 – 33 Present value: Mixed Streams – Consider the mixed streams of cash flows shown in the following table _____Cash flow stream_____ Year A B______ 0 -$50,000 $10,000 1 $40,000 $20,000 2 $30,000 $30,000 3 $20,000 $40,000 4 $10,000 -$50,000 Totals $50,000 $50,000 a. Find the present value of each stream using a 5% discount rate.b. Compare the calculated present values and discuss the in light of the undiscounted cash flows totaling $50,000 in...
Consider two streams of cash flows, A and B. Stream A’s first cash flow is $9,800 and is received three years from today. Future cash flows in Stream A grow by 3 percent in perpetuity. Stream B’s first cash flow is −$9,100, is received two years from today, and will continue in perpetuity. Assume that the appropriate discount rate is 11 percent. a.What is the present value of each stream? b.Suppose that the two streams are combined into one project,...
part 1 Find the present values of the following cash flow streams at a 10% discount rate. Do not round intermediate calculations. Round your answers to the nearest cent. 0 1 2 3 4 5 Stream A $0 $100 $350 $350 $350 $300 Stream B $0 $300 $350 $350 $350 $100 Stream A $ Stream B $ What are the PVs of the streams at a 0% discount rate? Round your answers to the nearest dollar. Stream A $ Stream...
there is no initial amount. Everything that you need is there, you do not need anything else. P5-31 Present value: Mixed streams Consider the mixed streams of cash flows shown in the following table. Year Cash flow stream B $-50,000 $10,000 40,000 20,000 30,000 30,000 20,000 40,000 10,000 -50,000 $150,000 $150,000 Totals 75% a. Find the present value of each stream using a 8% discount rate. b. Compare the calculated present values and discuss them in light of the undis-...
PICTODEPOO LoL OLULU ILI Save Homework: HW #3 Ch 5 - Online 2020 Score: 0 of 20 pts < 4 of 5 (3 complete) P5-33 (book/static) HW Score: 60%, 60 of 100 pt Question Help O Present value-Mixed streams Consider the mixed streams of cash flows shown in the following table, a. Find the present value of each stream using a 5% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows...
Find the present value of the following mixed stream of cash flows (as of Year 0) using a discount rate of 88%. Assume the cash flows are received at the end of each year. Year Cash Flow Stream 1 5 comma 0005,000 2 4 comma 0004,000 3 3 comma 0003,000 Year Cash Flow Stream 1 5 comma 0005,000 2 4 comma 0004,000 3 3 comma 0003,000 Present Value ($)equals=
P5-30 Value of a mixed stream For each of the mixed streams of cash flows shown in the following table, calculate the future value at the end of the final year if deposits are made into an account paying annual intertest of 8%. Assume that no withdrawls are made during the period and that the deposits a. At the end of each year (i.e., the first deposit b. At the beginning of each year (i.e., the first deposit are made...
Which one of the following will increase the present value of a finite stream of even cash flows? Assume a positive rate of return. A. Moving every cash flow one time period further into the future B. Decreasing the amount of each cash flow C. Increasing the Time 2 cash flow by $100 and lowering the Time 3 cash flow by $100 D. Moving the Time 1 cash inflow to Time 2 E. Increasing the discount rate