What is the fair value of these cash flows today

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Reference no: EM131027105

1. Your friend just bought a new car for $30,298. You expect that the value of the car will decline by 6 percent every year. What will be the value of the car in 8 years?

2. Starting at the end of year 2, and every even-numbered year thereafter (i.e., year 4, 6, 8, ... etc.), you expect to receive $656. You will receive a total of 16 payments. What is the fair value of these cash flows today, if the going rate is 6 percent per year?

Reference no: EM131027105

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