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Appropriate discount rate

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Find the present value of an income stream which has a negative flow of$100 per year for 3 years, a positive flow of $200 in the 4th year, and a positive flow of $300 per year in Years 5 through 8. The appropriate discount rate is 4 percent for each of the first 3 years and 5 percent for each of the later years. Thus, a cash flow accruing in Year 8should be discounted at 5 percent for some years and 4 percent in other years. All payments occur at year-end.

Reference no: EM131317854

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