Given the mixed streams of cash flows shown in the following table, answer parts (a) and (b):
Question:
Given the mixed streams of cash flows shown in the following table, answer parts (a) and (b):
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 total cash flows amount to $150,000 in each case.
Transcribed Image Text:
Cash Flow Stream Year $50,000 40,000 30,000 20,000 10.000 10,000 20,0 30,0 40,0 515 Totals
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a b Cash flow stream A has a higher present value 109857 than cash flow st...View the full answer
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Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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