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Calculating present value and outflow

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Reference no: EM133156884

Present Value (PV) is a formula used in Finance to calculate the present value of an amount to be received at a future date.

Using the information in your text on calculating Present Value and Outflow, compute Question 1 and Question 2. Be sure to show all of your work.

Consider the following uneven cash flow stream:

Year

Cash Flow

0

$0

1

$250

2

$400

3

$500

4

$600

5

$600

1. What is the present (Year 0) value if the opportunity cost (discount) rate is 10 percent? 

2. Add an outflow (or cost) of $1,000 at Year 0.

3. What is the present value (or net present value) of the stream? 

Reference no: EM133156884

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