What is the present value of the cash flow stream

Assignment Help Financial Management

Reference no: EM131874012

Consider another uneven cash flow stream:

Year Cash Flow

0 $2,000

1 $2,000

2 $0

3 $1,500

4 $2,500

5 $4,000

a. What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?

b. What is the value of the cash flow 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 (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.)

d. Time value analysis involves either discounting or compounding cash flows. Many healthcare financial management decisions—such as bond refunding, capital investment, and lease versus buy—involve discounting projected future cash flows. What factors must executives consider when choosing a discount rate to apply to forecasted cash flows?

Reference no: EM131874012

Questions Cloud

Account paying compound interest : Determine how much more interest would be earned in the account paying compound interest. Round to the nearest cent. Show your work!

Compute basic and diluted earnings per share : Question 1 - EPS; convertible preferred stock; convertible bonds; order of entry. Compute basic and diluted earnings per share for the year ended December 31

What will be the dividends and capital gains yield : What will be the dividends and capital gains yield once the supernormal growth rate ends?

Find the multifactor productivity : Find the multifactor productivity. Use two decimal Places. Units produced: 10,000. Standard Price: $26/unit.

What is the present value of the cash flow stream : What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?

What is the growing speed s of the radius : What is the growing speed s of the radius at the moment t? (Your final answer s = s(t) should be a function depending only on t).

Analyze how your company will implement the new-product : Describe the organization, who are they, what industry they operate in, their mission and values, as well as what makes them different from other organizations

Discuss a corporate cost allocation : Discuss a corporate cost allocation that occurs at your current or former place of business, being sure to address the following points: Describe the cost

Giving the exact solution : 1. Solve the eqaution, giving the exact solution which lie in [0,2p)

User Account

All Pages