# Question

You have an opportunity to make an investment that will pay $100 at the end of the first year, $400 at the end of the second year, $400 at the end of the third year, $400 at the end of the fourth year, and $300 at the end of the fifth year.

a. Find the present value if the interest rate is 8 percent.

b. What would happen to the present value of this stream of cash flows if the interest rate were 0 percent?

a. Find the present value if the interest rate is 8 percent.

b. What would happen to the present value of this stream of cash flows if the interest rate were 0 percent?

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