1) a)Preferred b) Common 2)a)equal b) Uneven

3)a)equal b) Uneven

4) a) NFV b) IRR c) NPV

5 a) NFV b) IRR c) NPV

6) workout the answer

Time Value of Money: Uneven Cash Flows Many financial decisions require the analysis of uneven, or nonconstant, cash flows Select- a stock dividends typically increase over time and investments in capital equipment almost always generate uneven cash flows. The term cash flow (CFt) denotes Select cash flows, while payment (PMT) designates Select cash flows coming at regular inte rvals The present value of an uneven cash flow stream is the sum of the PVs of the individual cash flows. The equation is: CF CF2 PV (1 (1 I) (1 +I) t 1. Similarly, the future value of an uneven cash flow stream is the sum of the FVs of the individual cash flows. Many calculators have an NFV key that lets you obtain the FV. However, if your calculator doesn't have a net future value (NFV) key, you can calculate the NFV as follows: NPV x (1 +I) NFV One can also find the interest rate of the uneven cash flow stream with a financial calculator and solving for the Select using the Select key. Quantitative Problem: You own a security with the cash flows shown below. 630 390 260 340 If you require a annual return of 12%, what is the present value of this cash flow stream? Round your answer to the nearest cent. Do not round intermediate calculations