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 value of the cash flow stream at the end of Year 5 if the cash flows are invested in an account that pays 10 percent annually?