Problem: Consider the following uneven cash flow stream:
Year Cash Flow
0 $ 0
1 $ 250
2 $ 400
3 $ 500
4 $ 600
5 $ 600
a. What is the present (Year 0) value If the opportunity cost (discount) rate is 10 percent?
b. Add an outflow (or cost) of $1,000 at Year 0. What is the present value (or net present value) of the stream?