Present values of single amounts and streams Below are two cash flow streams, A and B. Assuming

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Present values of single amounts and streams Below are two cash flow streams, A and B. Assuming that you have a 9% opportunity cost, which stream do you prefer?

Under each stream is a lump sum. If you like, you can choose the lump sum rather than the stream. For example, you can choose $2,825 right now rather than collecting cash flow stream A over five years. For each alternative, A and B, do you prefer the lump sum or the stream? Finally, if you can choose either lump sum or either stream, which choice do you make?

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Principles Of Managerial Finance

ISBN: 9781292400648

16th Global Edition

Authors: Chad Zutter, Scott Smart

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