Question

Asked Feb 3, 2020

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The present value of the following cash flow stream is $6500 when discounted at 10% annually. What is the value of the missing cash flow?

year Cash Flow

1 1000

2 ?

3 2000

4 2000

Thank you susan

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Step 1

The calculation of the missing cash flow is as follows:

Hence, the cash flow of the 2nd year is $3,294.

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