what are the three basic patterns of cash flow choose one to

Solution

The three basic patterns of cash flow are :

-A single stream of cash flow

-An annuity

-A mixed stream

Single stream of cash flow-

A single stream of cash flow is a single amount that is correctly invested or is expected in the future.

Future value refers to the amount that shall be obtained after a period of time for a single cash flow. To calculate the future value of a single stream,multiply the compunded stream of cash flow each year by the (1+r)where r is the interest rate.

The present value of a cash flow means how much the cash flow will be worth today. To calculate the present value of a cash divide the cash flow by the discounting factor at the prevailing interest rate at the number of years where you expect the cash flow to be received.