Question 3:

Required:

Calculate the present value of the following cash flows assuming a discount rate of 10%.

(a)A cash inflow of 5,000 in one year's time

(b)A constant annual cash inflow (an annuity) of 5,000 received for the next five years

(c)A constant cash inflow of 5,000 received in three years' time and for the next four years (time 3-7)

(d)A constant annual cash inflow (an annuity) of 5,000 received for the foreseeable future