d Exercise 4.5. Present Value-Mixed Stream Find the present value of the following stream of cash flows, assuming the firm's opportunity cost is 20%. Years Amount 1-6 $2300 7-10 $58,000 BASIC 1. Present Values. Compute the present value of a $100 cash flow for the following combinations of discount rates and times ar=8 percent, 1-10 years b. r=8 percent. = 20 years c. r=4 percent. 1-10 years 4 percent. 1-20 years *2. Future Values. Compute the future value of a $100 cash flow for the same combinations of rates and times as in problem 1. 3. Future Values. You deposit $1,000 into your bank account. If the bank pays 4 percent simple interest, how much will you accumulate in your account after 10 years? If the bank pays compound interest, how much of your earnings will be interest on interest? *4. Present Values. You will require 5700 in 5 years. If you earn 5 percent interest on your funds, how much will you need to invest today in order to reach your savings goal? 5. Calculating Interest Rate. Find the interest rate implied by the following combinations of present and future values: Present Value Years Future Value $400 $684 $183 5300 $300 6. Present Values. Would you rather receive $1,000 per year for 10 years or $800 per year for 15 years if a the interest rate is 5 percent? b. the interest rate is 20 percent? c. Why do your answers to parts (a) and (b) differ? *7. Present Values. What is the present value of the following cash flow stream if the interest rate is 5 percent? Year Cash Flow 1 $200 2 $400 $300 8. Number of Periods. How long will it take for $400 to grow to $1,000 at the interest rates specified? 4 S249 7 3