9.6 Consider the following uneven cash flow stream:

Year

Cash Flow

0

$0

1

250

2

400

3

500

4

600

5

600

a) What is the present (Year 0) value if the opportunity cost (discount) rate is 10 percent?

b) Add an outflow (or cost) of $1,000 at year 0.What is the present value (or net present value) of the stream?