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What is the net present value of the stream

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Reference no: EM132514727

Question - Consider another set of net cash flows: Please include the numbers do no put it on an excel spreadsheet. Simplified version please. Thanks!

Year

Cash Flow ($)

0

2,000

1

2,000

2

0

3

1,500

4

2,500

5

4,000

Required -

a. What is the net present value of the stream if the opportunity cost of capital is 10 percent?

b. What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually?

c. What cash flow today (time 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: EM132514727

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