Consider the mixed streams of cash flows shown in the following table. a. Find the present value

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

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a. Find the present value of each stream using a 5% discount rate.

b. Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $50,000 in each case. Is there some discount rate at which the present values of the two streams would be equal?

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Principles Of Managerial Finance Brief

ISBN: 9781292267142

8th Global Edition

Authors: Chad J. Zutter, Scott B. Smart

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Question Posted: Feb 24, 2024 11:00 PM

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Consider the mixed streams of cash flows shown in the following table. a. Find the present value

Question:

Year 0 W NO 1 2 3 4 Totals Cash flow stream A -$50,000 40,000 30,000 20,000 10,000 $50,000 B $10,000 20,000 30,000 40,000 -50,000 $50,000

Step by Step Answer:

a Finding the present value of each stream using a 5 discount rate To find the present value of each stream we can use the following formula for each ...View the full answer

Principles Of Managerial Finance Brief

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