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Present value: Mixed streams Consider the mixed streams of cash flows shown in the flowing table. ____________ Cash flow streams _________________________ Year A B 1
Present value: Mixed streams Consider the mixed streams of cash flows shown in the flowing table.
____________Cash flow streams_________________________ | ||
Year | A | B |
1 | $ 50,000 | $ 10,000 |
2 | 40,000 | 20,000 |
3 | 30,000 | 30,000 |
4 | 20,000 | 40,000 |
5 | 10,000 | 50,000 |
Totals $ 150,000 $150,000 |
Find the present value of each stream using a 15% discount rate.
Compare the calculated present value and discuss them in light of the undiscounted cash flow totally $150,000 in each case.
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