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Time Value Analysis of Uneven Cash Flow Stream

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.

$2.19