What is the present value of the following cash flow stream at a rate of 7.0%...

What is the present value of the following cash flow stream at a rate of 7.0% per year?
cash flow stream : 0=0$ 1=$75 2=$225 3=$0 4=$300 years and CF'S

Solutions

Expert Solution

Answer: Calculation of the present value of cash flows stream

	Year	Cash flows	Time value factor	Time value factor	Future value
	1	75	=1/(1+0.07)^1	0.9346	70.10
	2	225	=1/(1+0.07)^2	0.8734	196.52
	3	0	=1/(1+0.07)^3	0.8163	0.00
	4	300	=1/(1+0.07)^4	0.7629	228.87
				Total	495.48
	So, the Present value of the cash flow is $495.48 (Answer)

jeff jeffy answered 1 year ago

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