Consider the following uneven cash flow stream:
Year Cash Flow
0 $ 0
1 $ 250
2 $ 400
3 $ 500
4 $ 600
5 $ 600
a. What is the present (Year 0) value If the opportunity cost (discount) rate is 10 percent?
b. Add an outflow (or cost) of $1,000 at Year 0. What is the present value (or net present value) of the stream?

Solution Summary

The solution helps in calculating the present value and administering an outflow cost.

I need to find the PV of the cashflowstreams @ 8% compounded annually. and then (B). is 0 % compounded annually.
Unevencashflowstream.
A. Find the present values of the following cashflowstreams at 8 percent, compounded annually.
0 1 2 3 4 5
__________________________________________________
$0 $100

$2,566.70 in a project that is promising to return 12 percent per year. The cashflows are expected to be as follows:
End of Cash
Year Flow
1 $325
2 400
3 550
4 ?
5 750
6 800
What is the cashflow at the end of the 4th year?

Explain whether this is true or false and indicate why:
"To find the present value of an uneven series of cashflows, you might find the PVs of the individual cashflows and then sum them. Annuity procedures can never be of use, even if some of the cashflows constitute an annuity (for example, $100 cash for Years 3, 4, 5, an

An investment promises the following cashflowstream: $750 at Time 0; $2,450 at the end of Year 1 (or at t = 1); $3,175 at the end of Year 2; and $4,400 at the end of Year 3. At a discount rate of 8.0%, what is the present value of the cashflowstream?

My investment is expected to pay the following annual cashflows:
0 1 2 3 4 5
600 600 800 1200 1500
Being an investor I think the appropriate interest rate for this investment is 12.5%, what is the net present value of this cashflowstream?
Now if the price of t

Please see attached file for proper format.
Present and Future Value
Now consider an irregular cashflowstream (where CFs can take on any value).
a. Calculate the Present Value of the UnevenCashFlows. 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

Capital Budgeting and Investment Decisions
1. Find the following values for a lump sum assuming annual compounding:
a). The future value of $599 invested at 8 percent for one year.
b). The future value of $500 invested at 8 percent for five years.
c). The present value of $500 to be received in one year when the opportu