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Homework answers / question archive / Consider the mixed streams of cash flows shown in the following table
Consider the mixed streams of cash flows shown in the following table.
YearA Cash Flow StreamB Cash Flow Stream1$50,000$10,0002$40,000$20,0003$30,000$30,0004$20,000$40,0005$10,000$50,000Totals$150,000$150,000YearA Cash Flow StreamB Cash Flow Stream1$50,000$10,0002$40,000$20,0003$30,000$30,0004$20,000$40,0005$10,000$50,000Totals$150,000$150,000
Find the present value of each stream using a 15% discount rate.
Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling $150,000 in each case.
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