Homework answers / question archive / Consider the following uneven cash flow stream:                                                                                                                                                                                                  Year    Cash Flow                                                       0        $0                                                                              1         250                                                            2        400                                                                         3        500                                                                         4         600                                                                         5          600                                                                                                                                                              a

Consider the following uneven cash flow stream:                                                                                                                                                                                                  Year    Cash Flow                                                       0        $0                                                                              1         250                                                            2        400                                                                         3        500                                                                         4         600                                                                         5          600                                                                                                                                                              a

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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?