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Uneven cash flow stream

I need to find the PV of the cash flow streams @ 8% compounded annually. and then (B). is 0 % compounded annually.

Uneven cash flow stream.
A. Find the present values of the following cash flow streams at 8 percent, compounded annually.
0 1 2 3 4 5
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$0 $100 $400 $400 $400 $300 - STREAM A
$0 $300 $400 $400 $400 $100 - STREAM B

B. What are the PV's of the stream at 0 percent, compound annually?

Solution Preview

The present value is found by multiplying the cash flow by the PV factor. The PV factor is calculated as 1/(1+r)^n.
For Part A, we find the PV factors for the 5 years. These are
1/(1.08)^1= 0.9259
1/(1.08)^2= 0.8573
1/(1.08)^3= 0.7938
1/(1.08)^4= 0.7350
1/(1.08)^5= 0.6806
now multiply the cash flows by the respective factors, you get the following PVs (You can also get the PV factors from the ...

Solution Summary

The solution explains how to calculate the present value of an uneven cash flow stream

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