Consider the following timeline:

nata

casn

flow

If the current market rate of interest is $13\%,$ then the value of the cash flows in year $0$ and year $2$

as of year $1$ is

$.($Show your work. Either way $($the formula or financial calculator$)$

works.$)$

Hint: you need to calculate the future value $($FV$)$ of the amount at $Y=0$ to $Y=1.$ Then, discount

the amount at $Y=2$ back to $Y=1.$ Once you have both amounts in $Y=1,$ sum them up$,$ taking into

account their respective signs to find their net value at $Y=1.$