Chapter 5

Present value and Future Value of Uneven Cash Flows

1. The Leaning Tower of Pizza Company plans to save $20,000, $25,000, $27,500, and $30,000 at the end of each year for Years 1 to 4, respectively.

1. What would be the present value using the same cash flows in years 1 through 4 for the Leaning Tower of Pizza Company, if the discount rate is r = 3.5%?

Answer:

2. What would be the Future Value using the same cash flows in years 1 through 4 for the Leaning Tower of Pizza Company, if the compound rate = 3.5%?

Answer:

Please include a cash flow time line, with directional lines illustrating you are discounting each unequal cash flow to the present (see practice, in fact you can copy, paste, and edit, as you see fit), along with all variables, calculations, and sub-calculations.

# pts.	Component(No. 1a, 1b)
	Timeline
	General Formula
	Calculations Steps
	Answer
	Total Points