What is the present value of a firm with a five-year life span that earns the following

Question:

What is the present value of a firm with a five-year life span that earns the following stream of expected profit? (Treat all profits as being received at year-end.) Use a risk-adjusted of 12 percent.
Year Expected profit
1 ............ $10,000
2 ............ 20,000
3 ............ 50,000
4 ............ 75,000
5 ............ 50,000

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...