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Present Value--Mixed Streams Consider the mixed streams of cash flows shown in the following table: a.Find the present value of each stream using a 3%
Present Value--Mixed Streams
Consider the mixed streams of cash flows shown in the following table:
a.Find the present value of each stream using a 3% discount rate.
b.Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $40,000 in each case. Is there some discount rate at which the present values of the two streams would be equal?
Thank you in advance!!
Cash flow stream Year 0 1 2 3 4 A $-30,000 $25,000 $20,000 $15,000 $10,000 $40,000 B $10,000 $15,000 $20,000 $25,000 $-30,000 $40,000 TotalsStep by Step Solution
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