Use the following table of cash flows to answer parts (a) and (b). Assume an 8% discount
Question:
Use the following table of cash flows to answer parts (a) and (b). Assume an 8% discount rate.
End of YearCash Flow
1...............$10,000
2............... 10,000
3............... 10,000
4............... 12,000
5............... 12,000
6............... 12,000
7............... 12,000
8............... 15,000
9............... 15,000
10................ 15,000
a. Solve for the present value of the cash flow stream by summing the present value of each individual cash flow.
b. Solve for the present value by summing the present value of the three separate annuities (one current and two deferred).
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a b PV 25771 31551 22556 PV 79878 Year 1 2 ...View the full answer
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Related Book For 
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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