Question 1 10 marks

a) Explain what you understand by the phrase present value of a mixed stream? (3)

b) Calculate the present value of the mixed stream of Nawa Trading if a minimum return of 15 % can be earned. Use the appropriate interest factor. (7)

Year	1	2	3	4	5
Cash inflow	N$ 10 000	N$ 12 000	N$ 9 000	N$ 10 000	N$ 10 500

Interest factor 15%

Year	1	2	3	4	5
PVIF	0.870	0.756	0.658	0.572	0.497
FVIF	1.150	1.323	1.521	1.749	2.011