What is the present value of a stream of cash flows, which has the timeline given below. (After year 11, all cash flows are $500)Discount rate is 10%. CF $850 850 850 850 500 500 500 750 700 500 500……. Year 0 1 2 3 4 5 6 7 8 9 10 11…….

What is the present value of a stream of cash flows, which has the timeline given below. (After year 11, all cash flows are $500)Discount rate is 10%. CF $850 850 850 850 500 500 500 750 700 500 500……. Year 0 1 2 3 4 5 6 7 8 9 10 11…….

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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Question

What is the present value of a stream of cash flows, which has the timeline given below.
(After year 11, all cash flows are $500)Discount rate is 10%.

CF $850 850 850 850 500 500 500 750 700 500 500…….
Year 0 1 2 3 4 5 6 7 8 9 10 11…….

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