Use the Present Value of $1 table to determine the present value of $1 received one year from now. Assume an 8% interest rate. Use the same table to find the present value of $1 received two years from now. Continue this process for a total of five years. Round to three decimal places. (Click the icon to view Present Value of $1 table.) Read the requirements Requirement 1. What is the total present value of the cash flows received over the five-year period? Calculate the total present value of $1 received each year. (Round to three decimal places, X.XXX.) Present Value One year from now Two years from now Three years from now Four years from now Five years from now Total present value O Requirements 1 What is the total present value of the cash flows received over the five-year period? 2. Could you characterize this stream of cash flows as an annuity? Why or why not? 3. Use the Present Value of Ordinary Annuity of $1 table to determine the present value of the same stream of cash flows. Compare your results to your answer to Requirement 1. 4. Explain your findings.

Use the Present Value of $1 table to determine the present value of $1 received one year from now. Assume an 8% interest rate. Use the same table to find the present value of $1 received two years from now. Continue this process for a total of five years. Round to three decimal places. (Click the icon to view Present Value of $1 table.) Read the requirements Requirement 1. What is the total present value of the cash flows received over the five-year period? Calculate the total present value of $1 received each year. (Round to three decimal places, X.XXX.) Present Value One year from now Two years from now Three years from now Four years from now Five years from now Total present value O Requirements 1 What is the total present value of the cash flows received over the five-year period? 2. Could you characterize this stream of cash flows as an annuity? Why or why not? 3. Use the Present Value of Ordinary Annuity of $1 table to determine the present value of the same stream of cash flows. Compare your results to your answer to Requirement 1. 4. Explain your findings.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 11E

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