Question

eBook Problem 4-14 Uneven Cash Flow Stream Find the present values of the following cash flow streams. The appropriate interest rate is 6%. Round your answers to the nearest cent. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Chapter 4 Tool Kit.) Year Cash Stream A Cash Stream B 1 $100 $300 2 400 400 3 400 400 4 400 400 5 300 100 Stream A $ Stream B $ What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest cent. Stream A $ Stream B $

Hi i figured thos one out. but thank you

Answer 1

Year	Cash FLow Stream A	Present Value of Stream A(Cash Flow/1.06^year)	Cash Flow Stream B	Present Value of Stream B(Cash Flow/1.06^year)
1	$                     100.00	$                                  94.34	$                    300.00	$                               283.02
2	$                     400.00	$                                356.00	$                    400.00	$                               356.00
3	$                     400.00	$                                335.85	$                    400.00	$                               335.85
4	$                     400.00	$                                316.84	$                    400.00	$                               316.84
5	$                     300.00	$                                224.18	$                    100.00	$                                  74.73
	NPV (Total)	$                            1,327.20	NPV (Total)	$                            1,366.43

Hence, NPV value of cash flow stream A is 1327.2 and for stream B $1366.43