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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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