What is the present value of the following cash flow stream at a rate of 6.50%? Years: 0 1 2 3 4 CFs: $0 $77 $240 $0 $285 Group of answer choices $505.44 $456.17 $433.37 $411.88 $480.02
What is the present value of the following cash flow stream at a rate of 6.50%? Years: 0 1 2 3 4 CFs: $0 $77 $240 $0 $285 Group of answer choices $505.44 $456.17 $433.37 $411.88 $480.02
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...
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Question
What is the present value of the following cash flow stream at a rate of 6.50%?
Years: |
0
|
1
|
2
|
3
|
4
|
CFs: |
$0
|
$77
|
$240
|
$0
|
$285
|
Group of answer choices
$505.44
$456.17
$433.37
$411.88
$480.02
Expert Solution
Step 1
The current value of the cash flow or stream of cash flow after discounting is termed as the present value.
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