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Consider two streams of cash flows, A and B . Stream A ' s first cash flow is $ 1 0 , 0 0 0

Consider two streams of cash flows, A and B. Stream A's first cash flow is $10,000 and is
received three years from today. Future cash flows in Stream A grow by 3 percent in
perpetuity. Stream B's first cash flow is -$8,900, is received two years from today, and
will continue in perpetuity. Assume that the appropriate discount rate is 11 percent.
a. What is the present value of each stream? (A negative amount should be indicated
by a minus sign. Do not round intermediate calculations and round your answers to
2 decimal places, e.g.,32.16.)
Answer is complete but not entirely correct.
b. Suppose that the two streams are combined into one project, called C. What is the IRR
of Project C?(Do not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g.,32.16.)
Answer is complete but not entirely correct.
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