Present value of the cash flow stream


Problem:

You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose. A large networking company wants to incorporate your software into their systems and is offering to pay you $549,000 today, plus $549,000 at the end of each of the following six years for permission to do this.

Required:

Question: If the appropriate interest rate is 8 percent, what is the present value of the cash flow stream that the company is offering you?

Note: Please provide through step by step calculations.

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Accounting Basics: Present value of the cash flow stream
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