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What is the present value of cash flows

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Reference no: EM131360615

(1) If the discount (or interest) rate is positive, the present value of an expected series of payments will always exceed the future value of the same series.

(True/false/uncertain) Explain your answer.

(2) Assume that you will receive $2,000 a year in years 1 through 5, $3,000 a year in years 6 through 8, and $4,000 in year 9, with all cash flows to be received at the end of the year. If you require a 14% rate of return, what is the present value of these cash flows?

(3) If you presently have $6,000 invested at a rate of 15%, how many years will it take for your investment to triple? (Round up to obtain a whole number of years if necessary).

Reference no: EM131360615

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