Compare the calculated present values

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Question: Present value - Mixed streams Consider the mixed streams of cash flows shown in the following? table

Cash Flow Stream

Year A B
1 $22,500 $7,500
2 $18,750 $11,250
3 $15,000 $15,000
4 $11,250 $18,750
5 $7,500 $22,500
Totals $75,000 $75,000

(a) Find the present value of each stream using a 11?% discount rate

(b) Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling ? $75,000 in each case.

(c) Show computations using an Excel Spreadsheet. When solving for the present value of a single cash flow using an Excel? spreadsheet, you will need to enter the values of? Rate, Nper,? Fv, Pmt, and Type into the present value function

Reference no: EM132049762

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