# Present and future value of irregular cash flow stream

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Present and Future Value

Now consider an irregular cash flow stream (where CFs can take on any value).

a. Calculate the Present Value of the Uneven Cash Flows. Interest Rate = 10%

T=0 T=1 T=2 T=3 T=4 T=5

$0 $100 $300 $300 $300 $500

b. Calculate the Future Value of the Uneven Cash Flows.Interest Rate = 12%

T=0 T=1 T=2 T=3 T=4 T=5

$0 $100 $300 $300 $300 $500

c. Assume that an investment with the following positive cash flows has a cost of $957.90 (outflow). Find the rate of return on this investment.

d. How many years does it take for an investment to double if the interest rate is 1.25%?

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#### Solution Summary

The present and future value of irregular cash flow streams are determined.

$2.19