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?

Stream A Stream B 1,234 2,567 3,300 4,256 5,211 6,500 Totals 23,068 Year 1 SAND 2 3 4 5 6 6,200 5,100 4,632 4,000 2,223 913 23,068 Stream C 3,844 3,844 3,845 3,845 3,845 3,845 23,068