Calculate and rank the economic values of the following cash flow streams (i) A single payment of $10,000 eight years from now (ii) An annuity due starting today with eight annual payments of $850 (iii) An annuity due starting in eight years with eight annual payments of $1700 Do the calculations a...

The ranking does not depend on where the focal date is set The choice of ...

Calculate and rank the economic values of the following cash flow streams: (i) A single payment of

Question:

Calculate and rank the economic values of the following cash flow streams:
(i) A single payment of $10,000 eight years from now. (ii) An due starting today with eight annual payments of $850.
(iii) An due starting in eight years with eight annual payments of $1700. Do the calculations and ranking for each of two cases:
a. Money can earn 8% compounded annually for the next 16 years.
b. Moneycanearn10%compoundedannuallyforthenext16years.
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...