What is the value of each cash flow stream

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Assignment

1. Find the present value of the following cash flow streams under the following conditions:

Year      Cash Flow X    Cash Flow Y
  1             $600              $200
  2              500                 300
  3              400                 400
  4              300                 500
  5              200                 600

a. The appropriate discount rate is 9%.

b. What is the value of each cash flow stream at a zero percent discount rate?

2. Nelson wants to buy a car that costs $35,000. He has arranged to borrow the total purchase price of the car from her credit union at 3 percent interest rate. The loan requires quarterly payments for a period of five years. If the first payment is due three months (one quarter) after purchasing the car, what will be the amount of Nelson's quarterly payment on the loan?

Reference no: EM131446976

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