Question: Using an interest rate of5%per year, for the first two years and10%per year afterwards, what is the value today of the following cash flows: Time

Using an interest rate of 5% per year, for the first two years and 10% per year afterwards, what is the value today of the following cash flows:

Time        Cash Flow

1                   50

2                  100

3                   100

4-10                200 (7 cash flows - years 4,5,6,7,8,9 and 10)

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