Find and calculate the present value of an annuity

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Problem 1: If amounts differ over time calculate the present value of a single sum, if amounts are equal each period, calculate the present value of an annuity.

Problem 2: Why is present value calculated on cash flow and not on income?

Problem 3: Assume that you can receive $500,000, $515,000, and $600,000 over a 3 year period and the present value of those sums at 8% is $1,495,370. Explain what that means in simple terms.

Reference no: EM132725169

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