9.3 Consider another set of net cash flows:YearCash Flow ($)02,00012,0002031,50042,50054,000 What is the net present value of the stream if the opportunity cost of capital is 10 percent?What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually?What cash flow today (time 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)

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Answered: Consider another set of net cash flows:…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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9.3 Consider another set of net cash flows:

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

What is the net present value of the stream if the opportunity cost of capital is 10 percent?
What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually?
What cash flow today (time 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)

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