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?