Question: An investment promises the following cash flow stream: $5,000 at the end of Year 1 (or at T=1), $13,000 at the end of Year 2,

An investment promises the following cash flow stream: $5,000 at the end of Year 1 (or at T=1), $13,000 at the end of Year 2, $8,000 at the end of Year 3, and $12,000 at the end of Year 4.

At a discount rate of 12%, what is the present value of the cash flow stream?

Draw the Timeline and list the keys, inputs, and answers.

Please provide the answer with an explanation. Thank you!

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