Find the present value of the following mixed stream of cash flows (as of Year 0)...
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= |
Homework Answers
Discount Rate = 8%
PV = 
CFi / (1 + r)i
= [$5,000 / 1.08] + [$4,000 / 1.082] + [$3,000 / 1.083] = $4,629.63 + $3,429.36 + $2,381.50 = $10,440.48
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