Question
In: Finance
you are given the following time line year 1 +2,000 year 2 +2,000 year 3 +2000...
you are given the following time line year 1 +2,000 year 2 +2,000 year 3 +2000 year 4 +500 year 5 +500 year 6 +500 what is the value of the cash flow stream today if the discount rate is 16%?
Solutions
Expert Solution
Calculating the Present Value Today of cashFlow Stream if the discount rate is 16%:-
| Year | Cash Flow Stream ($) | PV Factor @16% | Present Value of Cash Flow Stream ($) |
| 1 | 2,000.00 | 0.86207 | 1,724.14 |
| 2 | 2,000.00 | 0.74316 | 1,486.33 |
| 3 | 2,000.00 | 0.64066 | 1,281.3153 |
| 4 | 500.00 | 0.55229 | 276.146 |
| 5 | 500.00 | 0.47611 | 238.057 |
| 6 | 500.00 | 0.41044 | 205.221 |
| 5,211.20 |
So, the value of the cash flow stream today is $5211.20
jeff jeffy answered 2 years agoRelated Solutions
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