Consider the mixed streams of cash flows shown in the following table.

a. Find the present value of each stream using a 15% discount rate.
b. Compare the calculated present values and discuss them in light of the fact that the undiscounted cash flows total $150,000 in eachcase.

Transcribed Image Text:

Cash flow stream Year $ 50,000 10,000 40,000 30,000 20,000 20,000 40,000 $150.000 Totals $150,000