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In the following case, the mixed end-of-period cash flow stream has an annuity embedded within it. Calculate the present value of the cash flow stream,
In the following case, the mixed end-of-period cash flow stream has an annuity embedded within it. Calculate the present value of the cash flow stream, assuming a 9% discount rate. Year 1 2 3 4 5 6 7 Present Value ($) = OWN Cash Flow $7,000 $8,000 $1,000 $1,000 $1,000 $1,000 $4,000 What is the present value of this stream of cash flows? (Round to the nearest cent.) Sabrina deposits $900 in an account at the end of each year for 5 years. If the account pays 4% interest annually, how much money will be in Sabrina's account at the end of 5 years? The future value of the ordinary annuity is $ (Round to the nearest cent.) You've just won the lottery and will receive equal payments of $50,000 at the end of each year for the next 20 years. Your attorney offers to pay you $400,000 today if you agree to give him the stream of payments. If you think you can invest at 12%, should you accept this offer? Note: Ignore taxation in your calculations. The present value of this ordinary annuity is $ (Round to the nearest dollar.)
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