What is the value today of a stream of cash flows

Reference no: EM131519207

Question: (a) What is the value today of a stream of cash flows paying $500 at the end of each of the next 8 years? Assume an interest rate of 10%.

(b) What is the value today of a stream of annual cash flows paying $500 at the beginning of each of the next 8 years (i.e. the first cash flow will occur today)? Assume an interest rate of 10%. (Helpful hint: remember that the PVA table is compiled on the basis that the first cash flow occurs in one year's time.)

Reference no: EM131519207

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