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The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Year 1 Annual Cash
The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Year 1 Annual Cash Flows Year 2 Year 3 $20,000 $180,000 Year 4 $300,000 Year 5 $350,000 $250,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 6.5%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? $1,625,000 $890,043 $450,000 O $1,825,000 Identify whether the situations described in the following table are examples of uneven cash flows or annuity payments: Uneven Annuity Payments Cash Flows Description Shania bought a new dress for her brother's wedding for $450. She negotiated a deal with the retailer in which she would pay for the dress in three installments of $250, $100, and $100 over the next three months. You signed up to make a monthly payment of $10 for one year for a lifetime tosubscription to your favorite magazine. British consols are British government bonds that promise to make payments of a specified amount at regular intervals to the bearer forever. You receive interest earnings from variable deposits in a regular interest-bearing savings account
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