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Q1. Compute the present value of the stream of cash flows based on the discount rate of around 8%. Annual cash flow is as shown below:

a) Year 1 = $100,000
b) Year 2 = $150,000
c) Year 3 = $200,000
d) Year 4 = $200,000
e) Year 5 = $150,000
f) Years 6-10 = $100,000

Q2. Compute the present value of the cash flow stream in problem above with the given interest rates:

a) Year 1 = 8%
b) Year 2 = 6%
c) Year 3 = 10%
d) Year 4 = 4%
e) Year 5 = 6%
f) Years 6-10 = 4%

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M910238

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