Problem:
I just inherited profits. The profit is believed to have 3yrs worth of profit deposit. Here is how much income this profits is projected to bring each year for the next 3yrs:
Year 1: 42,000,000
Year 2: $62,000,000
Year 3: $99,000,000
If I compute the present value of this stream of income at a discount rate of 8%. If I calculate the present value for whole stream income. ex: the total value of receiving all three payments ( how much would I pay right now to receive these three payments in the future).
Now I need to compute the present value of the income stream from the profits at a discount rate of 6%, and at a discount rate of 4%