Question
What is the present value of cash flows of $500 at the end of years 1 through 5, plus a cash flow of negative
What is the present value of cash flows of $500 at the end of years 1 through 5, plus a cash flow of negative $500 at the end of year 6, and cash flows of $1,000 at the end of years 7-10 if the appropriate discount rate is 10%? (hint, lay it out on a time line the complex cash flows, and make sure you know which are positive and which are negative flows, then apply the formulas to bring the values back to the present) GIVEN 0 i = 0.1 Year 1 2 3 4 5 6 7 8 9 10 $500 $500 $500 $500 $500 -$500 $1,000 $1,000 $1,000 $1,000
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
8th edition
77861620, 978-0077861629
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