Uneven Cash Flow Stream Find the present values of the following cash flow streams. The appropriate interest rate is 9%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Ch04 Tool Kit.xlsx.) Do not round intermediate calculations. Round your answers to the nearest cent. Year Cash Stream A Cash Stream B 1 $100 $250 2 400 400 3 400 400 4 400 400 5 250 100 Stream A: $ Stream B: $ What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar. Stream A $ Stream B $
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Uneven Cash Flow Stream
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The concept of money's time worth indicates that any sum of money is worth more currently than what it will be in the upcoming time. This is because of the fact that money can be invested today and grown. The current value of any sum indicates its present value and any accumulated value is regarded as the future value. A cash flow stream indicates a series of future cash flows expected at different durations. The sum of each cash flow's present value indicates the stream's current worth.
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