Compute the present value of the given cash flows

Reference no: EM132028234

Question: Part A: Using a discount rate of 9.3 percent, compute the present value of the following cash flows to the nearest dollar:

Year	Cash Flow
1	$7,745
2	$8,167
3	$15,601
4	$18,300
5	$9,206

Part B: Assuming a discount rate of 14 percent, what is the present value of the following stream of uneven cash flows over the next 10 years?

Year 1	$29,735
Year 2	$16,438
Year 3	$27,997
Year 4	$15,755
Year 5	$21,021
Year 6	$22,094
Year 7	$24,031
Year 8	$21,972
Year 9	$21,923
Year 10	$24,709

Part C: An investor is considering purchasing a financial security that promises to pay $510 per year for the next 3 years, then $3,015 per year for the next 2 years after that. If the investor thinks the appropriate discount rate is 10.4 percent for investments that have this level of risk, what would be the present value of those five payments today?

Reference no: EM132028234

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