Consider another uneven cash flow stream:
Year Cash Flow 0 $2,000 1 $2,000 2 0 3 1,500 4 2,500 5 4,000
a) What is the present ( year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?
b) What is the future (year 5) value of the cash flow stream if the cash flows are invested in an account that pays 10 percent annually?
c) What cash flow is needed today year 0, in liue of 2000 cash flow, would be needed to accumulate 20,000 at the end of year 5?