Find the present values of the following cash flow streams. The appropriate interest rate is 11%. Round your answers to the nearest cent. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0.
|
Year
|
Cash Stream A
|
Cash Stream B
|
|
1
|
$100
|
$300
|
|
2
|
400
|
400
|
|
3
|
400
|
400
|
|
4
|
400
|
400
|
|
5
|
300
|
100
|
What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest cent.