Consider the following uneven cash flow stream

0	0
1	$250
2	$400
3	$500
4	$600
5	$600

What is the present (Year 0) value if the opportunity cost (discount) rate is 10%? Add an outflow (or cost) of $1,000 at Year 0. What is the present value of the cash flow stream?

Your oldest daughter is about to start kindergarten at a private school. Tuition is $10,000 per year payable at the beginning of the school year. You expect to keep your daughter in private school through high school. You expect tuition to increase at a rate of 5% per year over the 13 years of her schooling. What is the present value of the tuition payments if the discount rate is 6% per year?