Find the present value of the following cash flow streams. The appropriate inter

Question

Find the present value of the following cash flow streams. The appropriate interest rate is 8%.
Year Cash Stream A Cash Stream B 1 $100 $300 2 $400 $400 3 $400 $400 4 $400 $400 5 $300 $100 Find the present value of the following cash flow streams. The appropriate interest rate is 8%.
Year Cash Stream A Cash Stream B 1 $100 $300 2 $400 $400 3 $400 $400 4 $400 $400 5 $300 $100 Find the present value of the following cash flow streams. The appropriate interest rate is 8%.
Year Cash Stream A Cash Stream B 1 $100 $300 2 $400 $400 3 $400 $400 4 $400 $400 5 $300 $100 Find the present value of the following cash flow streams. The appropriate interest rate is 8%.
Year Cash Stream A Cash Stream B 1 $100 $300 2 $400 $400 3 $400 $400 4 $400 $400 5 $300 $100
Year Cash Stream A Cash Stream B 1 $100 $300 2 $400 $400 3 $400 $400 4 $400 $400 5 $300 $100

Explanation / Answer

Present value of cash stream A = (100*.9259)+(400*.8573)+(400*.7938)+(400*.7350)+(300*.6806)

                                             = 92.59+342.92+317.52+294+204.18

                                              = $ 1,251.21

Present value of cash stream B =(300*.9259)+(400*.8573)+(400*.7938)+(400*.7350)+(100*.6806)

                                              = 277.77+342.92+317.52+294+68.06

                                           = $ 1,300.27

Year Present value @8% (from annuity table) 1 .9259 2 .8573 3 .7938 4 .7350 5 .6806

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