eBook

Uneven Cash Flow Stream

1. Find the present values of the following cash flow streams. The appropriate interest rate is 11%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF₀ = 0. Do not round intermediate calculations. Round your answers to the nearest cent.

   Year	Cash Stream A	Cash Stream B
   1	$100	$250
   2	400	400
   3	400	400
   4	400	400
   5	250	100

   Stream A: $

   Stream B: $

2. What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar.

   Stream A $

   Stream B $