The present value of the following cash flow stream is $5,933.86 when discounted at 11 percent annually. Assume the cash flows happen at the end of each year. What is the value of the missing cash flow at the end of year 2? ↓ Year Cash Flow 1 $2,000 2 ? 1,750 1,250 AWN 3 4

The present value of the following cash flow stream is $5,933.86 when discounted at 11 percent annually. Assume the cash flows happen at the end of each year. What is the value of the missing cash flow at the end of year 2? ↓ Year Cash Flow 1 $2,000 2 ? 1,750 1,250 AWN 3 4

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 1MC

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

The present value of the following cash flow stream is $5,933.86 when discounted at
11 percent annually. Assume the cash flows happen at the end of each year. What is
the value of the missing cash flow at the end of year 2?↓
↓
Year
Cash Flow
1
$2,000
2
?
3
1,750
4
1,250
↓

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