What is the value of the entire cash flow stream

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Reference no: EM131303772

Consider another uneven cash flow stream: (Can you provide xcel formulas/calculations?)

Year Cash Flow

0 $1,000

1 $2,000

2 $0

3 $1,500

4 $4,500

5 $4,000

6 $3,000

7 $5,000

A) What is the value of the entire cash flow stream at the end of Year 7 if all of the cash flows are invested in an account that pays 10% annually?

B) What cash flow today (Year 0), in lieu of the $1,000 cash flow, would be needed to accumulate a future value of exactly $50,000 at the end of Year 7? Hint, replace the Year 0 cash flow with X and solve for X, assuming that the cash flows for Years 1 through 7 remain the same. Also assume annual compounding of cash flows.

Reference no: EM131303772

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