Find the present value of the streams of cash flows shown in

Find the present value of the streams of cash flows shown in the following? table, . Assume that the? firm\'s opportunity cost is 15?%.

-2,000 1 $9,000 1-5 $11,000/yr

2 $3,100 2-5 $5,200/yr 6-10 $8,100/yr

3 $3,900 6 $7,000

4 $6,100

5 $8,000

Solution

Stream - 1 Year CF DF PV 1 -2000 0.869565 -1739.13 2 3100 0.756144 2344.045 3 3900 0.657516 2564.313 4 6100 0.571753 3487.695 5 8000 0.497177 3977.414 Present value of cash flow 10634.34 Stream - 2 year CF DF PV 1 9000 0.869565 7826.087 2 5200 0.756144 3931.947 3 5200 0.657516 3419.084 4 5200 0.571753 2973.117 5 5200 0.497177 2585.319 6 7000 0.432328 3026.293    Present value of cash flow 23761.85 Stream - 3 Year CF DF PV 1 11000 0.869565 9565.217 2 11000 0.756144 8317.58 3 11000 0.657516 7232.679 4 11000 0.571753 6289.286 5 11000 0.497177 5468.944 6 8100 0.432328 3501.854 7 8100 0.375937 3045.09 8 8100 0.326902 2647.904 9 8100 0.284262 2302.526 10 8100 0.247185 2002.196    Present value of cash flow 50373.28