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
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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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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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