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Consider the following cash flow streams: Year Cash Stream A Cash Stream B 1 $100 $300 2 $400 $400 3 $400 $400 4 $400 $400

Consider the following cash flow streams:

Year Cash Stream A Cash Stream B

1 $100 $300

2 $400 $400

3 $400 $400

4 $400 $400

5 $300 $100

The appropriate discount rate is 12 percent.

a. What is the present value of each cash flow stream?

b. What is the future value of each cash flow stream?

c. What is the value of each cash flow stream at Year 3?

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