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Chapter $5$

Present value and Future Value of Uneven Cash Flows

The Peculiar Pepperoni Pizza Parlor is on a mission to save some dough for a new pizza oven. They plan to stash away $$10,000,$$$15,000,$$$17,500,$ and $$22,000$ at the end of each year for Years $1$ to $4,$ respectively.

a$)$ What would be the present value of this saucy savings plan for the Peculiar Pepperoni Pizza Parlor, if the discount rate is a cheesy $4\mathrm{.}1\%?$

b$)$ What would be the future value of their doughy dreams, using the same cash flows for Years $1$ through $4,$ if the compound rate is a spicy $5\%?$

So$,$ the present value of the Peculiar Pepperoni Pizza Parlor's savings plan is the future value of their oven$-$fund is a piping hot

Please include a cash flow timeline, 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.