Investment analysis assignment 4
Consider the mixed streams of cash flows shown in the following table.
Cash flow stream
Year A B
1 $50,000 $10,000
2 40,000 20,000
3 30,000 30,000
4 20,000 40,000
5 10,000 50,000
Totals $150,000 $150,000
a) Find the present value of each stream using a 15% discount rate.
b) Compare the calculated present values and discuss them in light of the undiscounted
cash flows totalling $150,000 in each case.
Consider the mixed streams of cash flows shown in the following table.
Cash flow stream
Year A B
1 $50,000 $10,000
2 40,000 20,000
3 30,000 30,000
4 20,000 40,000
5 10,000 50,000
Totals $150,000 $150,000
a) Find the present value of each stream using a 15% discount rate.
b) Compare the calculated present values and discuss them in light of the undiscounted
cash flows totalling $150,000 in each case.
