present value Ralph is praeticing present value mechanies. For this purpose, the following eash infIows are assumed. Eaeh eash inflow occurs at the end of the indieated year.

Whatever interest rate is present is constant throughout the horizon.

endofyear 1 2 3 4 5 6 7 amount 1,200 6,750 8,690 5,000 7,800 6,200 125 ehapter 2 a] Compute the present value, as of the start of the first year, assuming adiseount rate of r = 12% per year.
b] Repeat the above exercise for discount rates of 8%,10%, 14%, and 16%.
e] Now assume a discount rate of 11 %. Compute the present value, as of the start of year t of the remaining eash flows. Do this for t = 1,2, ... ,AppendixLO1