Question
Given the mixed streams of cash flows shown in the Table below, answer parts (a) and (b). Cash Flow Stream Year Alpha Beta 1 R150,000
Given the mixed streams of cash flows shown in the Table below, answer parts (a) and (b).
| Cash Flow Stream | ||
| Year | Alpha | Beta |
| 1 | R150,000 | R110,000 |
| 2 | R140,000 | R120,000 |
| 3 | R130,000 | R130,000 |
| 4 | R120,000 | R140,000 |
| 5 | R110,000 | R150,000 |
| Totals | R650,000 | R650,000 |
a. Find the present value of each stream, using a 18% discount rate
b. compare the present values, and explain why they vary even though both streams pay R650,000 over five years.
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Inside Private Equity
Authors: James M. Kocis, James C. Bachman IV, Austin M. Long III, Craig J. Nickels
1st Edition
0470421894, 978-0470421895
