Consider another uneven cash flow stream

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Reference no: EM131291885

Consider another uneven cash flow stream:

Year Cash Flow

0 3,000

1 2,000

2 1,500

3 0

4 2,000

5 4,000

a. What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 8 percent?

b. What is the future (Year 5) value of the cash flow stream if the cash flows are invested in an account that pays 8 percent annually?

c. What cash flow today (Year 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of Year 5? (Assume that the cash flows for Years 1 through 5 remain the same.)

Reference no: EM131291885

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