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Question
Find the present value of an income stream which has a negative flow of $100 per year for 3 years, a positive flow of $200 in the 4th year, and a positive flow of $300 per year in Years 5 through 8. The appropriate discount rate is 4 percent for each of the first 3 years and 5 percent for each of the later years. Thus, a cash flow accruing in Year 8 should be discounted at 5 percent for some years and 4 percent in other years. All payments occur at year-end.
a. $528.21
b. $1,329.00
c. $792.49
d. $1,046.41
e. $875.18
Answer
This answer is hidden. It contains 460 characters.
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