Consider the following cash flow streams, where each cash flow is coming in or going out at the end of each annual period:

REQUIRED:

A. Find the present value of the cash flows in stream A at an interest rate of 6%.

B. Find the present value of the cash flows in stream B at an interest rate of 6%.

C. Find the present value of the cash flows in stream C at an interest rate of 6%.

D. If you, as a profit maximizer, are on the receiving side of these cash flows, Which stream of cash flows would be the best for you?

\begin{tabular}{|r|r|r|r|} \hline Year & Stream A & Stream B & Stream C \\ \hline 1 & 1,100 & 5,500 & 6,600 \\ \hline 2 & 2,200 & 2,200 & 5,500 \\ \hline 3 & 3,300 & 6,600 & 4,400 \\ \hline 4 & 4,400 & 4,400 & 3,300 \\ \hline 5 & 5,500 & 1,100 & 2,200 \\ \hline 6 & 6,600 & 3,300 & 1,100 \\ \hline Totals & 23,100 & 23,100 & 23,100 \\ \hline \end{tabular} A Present value B \begin{tabular}{|r|r|c|c|} \hline & & \multicolumn{1}{|c|}{6%} & \\ \hline \multicolumn{1}{|r|}{ Year } & Cashflow & Factor & Extension \\ \hline 1 & & & \\ \hline 2 & & & \\ \hline 3 & & & \\ \hline 4 & & & \\ \hline 5 & & & \\ \hline 6 & & & \\ \hline Present value & & & \\ \hline \end{tabular} C D Double click and put your answer here