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Calculate the present value of the income streams A to E in Table 1 at an interest rate of 2 percent and again at an
Calculate the present value of the income streams A to E in Table 1 at an interest rate of 2 percent and again at an interest rate of 10 percent
The present value of income of stream A at an interest rate of 2 percent is $___.
The present value of income of stream B at an interest rate of 2 percent is $___.
The present value of income of stream C at an interest rate of 2 percent is $___.
The present value of income of stream D at an interest rate of 2 percent is $___.
The present value of income of stream E at an interest rate of 2 percent is $___.
The present value of income stream A at an interest rate of 10 percent is $__.
The present value of income stream B at an interest rate of 10 percent is $__.
The present value of income stream C at an interest rate of 10 percent is $__.
The present value of income stream D at an interest rate of 10 percent is $__.
The present value of income stream E at an interest rate of 10 percent is $__.
Suppose the investment behind the flow of income E is a machine that costs $1,130 at the beginning of year 1. Would you buy the machine if the interest rate were 2 percent? Yes or No
Would you buy the machine if the interest rate were 10 percent? Yes or No
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