Avocado plants takes two years to mature before they bear fruit. Peter Ip, an owner of an
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Avocado plants takes two years to mature before they bear fruit. Peter Ip, an owner of an avocado farm, expects that it will produce $1000 in the third year, $1500 the year after, $2000 in the fifth year and $2500 per annum thereafter. Interest is 9% per annum compounded annually.
(a) What is the discounted value of the constant cash flow stream beginning in the sixth year?
(b) What is the present value of the whole cash flow stream?
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
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