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Homework answers / question archive / Assume that the correct discount rate for the following cash flows is 8%

Assume that the correct discount rate for the following cash flows is 8%

Finance

Assume that the correct discount rate for the following cash flows is 8%. Today is January 1, year 1. Calculate the present value of each of the following cash flows.                                          

a.  $50 at the end of 3 years, i.e., December 31, year 3

b. $50 at the end of 100 years, i.e., December 31, year 100

c.  $50 received at the end of each year for 20 years, i.e., December 31 each year from year 1 to year 20

d.  $50 received at the beginning of each year for 20 years, i.e., January 1 each year from year 1 to year 20

Option 1

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