Consider another uneven cash flow stream: Year Cash Flow 0 3,000 1 2,000 2...

70.2K

Verified Solution

Question

Accounting

Consider another uneven cash flow stream:

Year Cash Flow

0 3,000 1 2,000 2 1,500 3 0 4 2,000 5 4,000

a. What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 8 percent? b. What is the future (Year 5) value of the cash flow stream if the cash flows are invested in an account that pays 8 percent annually? c. What cash flow today (Year 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of Year 5? (Assume that the cash flows for Years 1 through 5 remain the same.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students