Question: Present value - Mixed streams Consider the mixed streams of cash flows shown in the following? table
| Cash Flow Stream |
|
|
| Year |
A |
B |
| 1 |
$22,500 |
$7,500 |
| 2 |
$18,750 |
$11,250 |
| 3 |
$15,000 |
$15,000 |
| 4 |
$11,250 |
$18,750 |
| 5 |
$7,500 |
$22,500 |
| Totals |
$75,000 |
$75,000 |
(a) Find the present value of each stream using a 11?% discount rate
(b) Compare the calculated present values and discuss them in light of the undiscounted cash flows totaling ? $75,000 in each case.
(c) Show computations using an Excel Spreadsheet. When solving for the present value of a single cash flow using an Excel? spreadsheet, you will need to enter the values of? Rate, Nper,? Fv, Pmt, and Type into the present value function