Problem 4-14 Uneven Cash Flow Stream Find the present values of the following cash flow streams. The appropriate...
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Problem 4-14
Uneven Cash Flow Stream
- Find the present values of the following cash flow streams. Theappropriate interest rate is 6%. Round your answers to the nearestcent. (Hint: It is fairly easy to work this problemdealing with the individual cash flows. However, if you have afinancial calculator, read the section of the manual that describeshow to enter cash flows such as the ones in this problem. This willtake a little time, but the investment will pay huge dividendsthroughout the course. Note that, when working with thecalculator's cash flow register, you must enter CF0 = 0.Note also that it is quite easy to work the problem with Excel,using procedures described in the Chapter 4 Tool Kit.)
Year Cash Stream A Cash Stream B 1 $100 $300 2 400 400 3 400 400 4 400 400 5 300 100
Stream A $
Stream B $
- What is the value of each cash flow stream at a 0% interestrate? Round your answers to the nearest cent.
Stream A $
Stream B $
Problem 4-14
Uneven Cash Flow Stream
- Find the present values of the following cash flow streams. Theappropriate interest rate is 6%. Round your answers to the nearestcent. (Hint: It is fairly easy to work this problemdealing with the individual cash flows. However, if you have afinancial calculator, read the section of the manual that describeshow to enter cash flows such as the ones in this problem. This willtake a little time, but the investment will pay huge dividendsthroughout the course. Note that, when working with thecalculator's cash flow register, you must enter CF0 = 0.Note also that it is quite easy to work the problem with Excel,using procedures described in the Chapter 4 Tool Kit.)
Year Cash Stream A Cash Stream B 1 $100 $300 2 400 400 3 400 400 4 400 400 5 300 100
Stream A $
Stream B $ - What is the value of each cash flow stream at a 0% interestrate? Round your answers to the nearest cent.
Stream A $
Stream B $
Answer & Explanation Solved by verified expert
| Calculation of present value of stream A: | |||
| Time | Cashflow | PVF @6% | PV |
| 1.00 | 100 | 0.9434 | 94.34 |
| 2.00 | 400 | 0.8900 | 356.00 |
| 3.00 | 400 | 0.8396 | 335.85 |
| 4.00 | 400 | 0.7921 | 316.84 |
| 5.00 | 300 | 0.7473 | 224.18 |
| 1,327.20 | |||
| Present value is $1327.20 | |||
| Calculation of present value of stream B: | |||
| Time | Cashflow | PVF @6% | PV |
| 1.00 | 300 | 0.9434 | 283.02 |
| 2.00 | 400 | 0.8900 | 356.00 |
| 3.00 | 400 | 0.8396 | 335.85 |
| 4.00 | 400 | 0.7921 | 316.84 |
| 5.00 | 100 | 0.7473 | 74.73 |
| 1,366.43 | |||
| Present value is $1366.43 | |||
| Calculation of present value of stream A: | |||
| Time | Cashflow | PVF @0% | PV |
| 1.00 | 100 | 1.0000 | 100.00 |
| 2.00 | 400 | 1.0000 | 400.00 |
| 3.00 | 400 | 1.0000 | 400.00 |
| 4.00 | 400 | 1.0000 | 400.00 |
| 5.00 | 300 | 1.0000 | 300.00 |
| 1,600.00 | |||
| Present value is $1600 | |||
| Calculation of present value of stream B: | |||
| Time | Cashflow | PVF @0% | PV |
| 1.00 | 300 | 1.0000 | 300.00 |
| 2.00 | 400 | 1.0000 | 400.00 |
| 3.00 | 400 | 1.0000 | 400.00 |
| 4.00 | 400 | 1.0000 | 400.00 |
| 5.00 | 100 | 1.0000 | 100.00 |
| 1,600.00 | |||
| Present value is $1600 | |||
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Problem 4-14Uneven Cash Flow StreamFind the present values of the following cash flow streams. Theappropriate interest rate is 6%. Round your answers to the nearestcent. (Hint: It is fairly easy to work this problemdealing with the individual cash flows. However, if you have afinancial calculator, read the section of the manual that describeshow to enter cash flows such as the ones in this problem. This willtake a little time, but the investment will pay huge dividendsthroughout the course. Note that, when working with thecalculator's cash flow register, you must enter CF0 = 0.Note also that it is quite easy to work the problem with Excel,using procedures described in the Chapter 4 Tool Kit.)YearCash Stream ACash Stream B1$100$3002400400340040044004005300100Stream A $ Stream B $ What is the value of each cash flow stream at a 0% interestrate? Round your answers to the nearest cent.Stream A $ Stream B $
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