6. Now consider the uneven cash flow stream stemming from the lease agreement given in the case....
Question:
6. Now consider the uneven cash flow stream stemming from the lease agreement given in the case.
a. what is the present (year 0) value of the annual lease cash flows if the opportunity cost
rate is 10.0 percent annually?
End of Year Net Cash Flows Annuity Factor Present Year Values
5 $20,000 .6209 $12,418
4 $16,000 .6830 $10,928
3 $ 2000 .7513 $ 1,502
2 $14,000 .8264 $11,569
1 $12,000 .9091 $10,909
0 0 0 $47,326
Question
"What amount of interest and principal will be repaid?"