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FratBro23
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Question description


Consider the following uneven cash flow stream:

   Year          Cash  Flow
     0       $     0
     1          250
     2          400
     3          500
     4          600
     5          600

a.  What  is the present (Year 0) value if the opportunity cost (discount) rate is 10  percent?

b.  Add an outflow (or cost) of $1,000 at year 0. What is the  present value (or net present value) of the stream?

Consider another  uneven cash flow stream:

           Year                     Cash  Flow
           0                           $ 2,000
           1                              2,000
           2                                     0
           3                              1,500
           4                              2,500
           5                               4,000

a.  What is the present (Year 0) value of the cash flow stream if  the opportunity cost rate is 10 percent?


Tutor Answer

(Top Tutor) Daniel C.
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School: Boston College
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