Question

4.11.2 - Mixed Streams with an Initial Cash Flow
You receive $10,000 now for an investment that will give you cash flows of $1000 in one year, $2000 in two years, $3000 in three years, and $4000 in four years. If the discount rate is 5% then what is the PV of this investment? (Enter the answer in dollar format without $ sign or thousands comma -> 3519.23 and not $3,519.23 or 3,519.23)

4.11.3 - Mixed Streams with Repeating Cash Flows
You receive $10,000 now for an investment that will return cash flows of $2,000 per year for five years and then $3,000 per year for another 5 years. What is the present value if the discount rate is 5%? (Enter the answer in dollar format without $ sign or thousands comma -> 3519.23 and not $3,519.23 or 3,519.23)

Answer 1

4.11.2.The question is solved by computing the net present value.

Net present value is solved using a financial calculator. The steps to solve on the financial calculator:

• Press the CF button.
• CF0= $10,000.
• Cash flow for all the years should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow, press the NPV button and enter the discount rate of 5%.
• Press the down arrow and CPT buttons to get the net present value.  

Net Present value of cash flows at 5% discount rate is $18,648.76.

4.11.3.The question is solved by computing the net present value.

Net present value is solved using a financial calculator. The steps to solve on the financial calculator:

• Press the CF button.
• CF0= $10,000.
• Cash flow for all the years should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow, press the NPV button and enter the discount rate of 5%.
• Press the down arrow and CPT buttons to get the net present value.  

Net Present value of cash flows at 5% discount rate is $28,835.73.