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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 7% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 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 of stream A is $ 61413. (Round to the nearest dollar.) The present value of the cash flows of stream B is $ 78016. (Round to the nearest dollar.) b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 in each case. (Select the best answer below.) OB. Cash flow stream. with a present value of $61,413, is lower than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the early years, while the positive cash flows are received further in the future. OA. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the later years when their present value cash flows are received in the earlier years. greater, while the negative OC. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the positive cash inflows occur in A in the early years when their present value is greater, while the negative cash flow is received further in the future. OD. Cash flow stream. with a present value of $78,016, is higher than cash flow stream B's present value of $61,413 because the positive cash inflows occur in A in the early years when their present value is greater, while the negative cash flows is received further in the future.

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 7% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 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 of stream A is $ 61413. (Round to the nearest dollar.) The present value of the cash flows of stream B is $ 78016. (Round to the nearest dollar.) b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 in each case. (Select the best answer below.) OB. Cash flow stream. with a present value of $61,413, is lower than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the early years, while the positive cash flows are received further in the future. OA. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the later years when their present value cash flows are received in the earlier years. greater, while the negative OC. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the positive cash inflows occur in A in the early years when their present value is greater, while the negative cash flow is received further in the future. OD. Cash flow stream. with a present value of $78,016, is higher than cash flow stream B's present value of $61,413 because the positive cash inflows occur in A in the early years when their present value is greater, while the negative cash flows is received further in the future.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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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 7% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 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 stream A is $ 61413. (Round to the nearest dollar.) The present value of the cash flows of stream B is $ 78016. (Round to the nearest dollar.) b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 in each case. (Select the best answer below.) O A. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the later years when their present value is greater, while the negative cash flows are received in the earlier years OB. Cash flow stream A, with a present value of $61,413, is lower than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the early years, while the positive cash flows are received further in the future. OC. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the positive cash inflows occur in A in the early years when their present value cash flow is received further in the future. O D. Cash flow stream A, with a present value of $78,016, is higher than cash flow stream B's present value of $61,413 because the positive cash inflows occur in A in the early years when their present value cash flows received further the future. greater, while the negative greater, while the negative
Transcribed Image Text: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 7% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 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 stream A is $ 61413. (Round to the nearest dollar.) The present value of the cash flows of stream B is $ 78016. (Round to the nearest dollar.) b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 in each case. (Select the best answer below.) O A. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the later years when their present value is greater, while the negative cash flows are received in the earlier years OB. Cash flow stream A, with a present value of $61,413, is lower than cash flow stream B's present value of $78,016 because the negative cash inflow occurs in A in the early years, while the positive cash flows are received further in the future. OC. Cash flow stream A, with a present value of $61,413, is higher than cash flow stream B's present value of $78,016 because the positive cash inflows occur in A in the early years when their present value cash flow is received further in the future. O D. Cash flow stream A, with a present value of $78,016, is higher than cash flow stream B's present value of $61,413 because the positive cash inflows occur in A in the early years when their present value cash flows received further the future. greater, while the negative greater, while the negative
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 7% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 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 of stream A is $ 61413. (Round The present value of the cash flows of stream B is $78016. (Round to b. Compare the calculated present values and discuss them in light of t OA. Cash flow stream A, with a present value of $61,413, is higher t cash flows are received in the earlier years. OB. Cash flow stream A, with a present value of $61,413, is lower th future. OC. Cash flow stream A, with a present value of $61,413, is higher t cash flow is received further in the future. O D. Cash flow stream A, with a present value of $78,016, is higher 1 cash flows is received further in the future. Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year 0 1 2 3 4 Totals Print Cash flow stream A B $-60,000 $20,000 $50,000 $30,000 $40,000 $40,000 $30,000 $20,000 $80,000 $50,000 $-60,000 $80,000 Done X later years when their present value is greater, while the negative arly years, while the positive cash flows are received further in the arly years when their present value is greater, while the negative arly years when their present value is greater, while the negative
Transcribed Image Text: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 7% discount rate. b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $80,000 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 of stream A is $ 61413. (Round The present value of the cash flows of stream B is $78016. (Round to b. Compare the calculated present values and discuss them in light of t OA. Cash flow stream A, with a present value of $61,413, is higher t cash flows are received in the earlier years. OB. Cash flow stream A, with a present value of $61,413, is lower th future. OC. Cash flow stream A, with a present value of $61,413, is higher t cash flow is received further in the future. O D. Cash flow stream A, with a present value of $78,016, is higher 1 cash flows is received further in the future. Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year 0 1 2 3 4 Totals Print Cash flow stream A B $-60,000 $20,000 $50,000 $30,000 $40,000 $40,000 $30,000 $20,000 $80,000 $50,000 $-60,000 $80,000 Done X later years when their present value is greater, while the negative arly years, while the positive cash flows are received further in the arly years when their present value is greater, while the negative arly years when their present value is greater, while the negative
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