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Consider another set of net cash flow Year Cash Flow 0 $2,000 1 2,000 2 0 3 1,500 4 2,500 5 4,000 a. What is

Consider another set of net cash flow

Year Cash Flow

0 $2,000

1 2,000

2 0

3 1,500

4 2,500

5 4,000

a. What is the net present value of the stream if the opportunity cost of capital is 10%?

b. What is the value of the stream at the end of Year 5 if the cash flows are invested in an account that pays 10% annually??

c. What cash flow today (Year 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of Year 5?? (Assume that the cash flows for Year 1 through 5 remain the same.)

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