SOLUTION: You have an opportunity to make an investment that will pay $100 at the end of the first year, $400 at the end of the second year, $400 at the end of the third year, $400 at the en
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Question 1160352: You have an opportunity to make an investment that will pay $100 at the end of the first year, $400 at the end of the second year, $400 at the end of the third year, $400 at the end of the fourth year, and $300 at the end of the fifth year.
a. Find the present value if the interest rate is 8 percent.
b. What would happen to the present value of this stream of cash flows if the interest rate were 0 percent? Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! You have an opportunity to make an investment that will pay:
$100 at the end of the first year,
$400 at the end of the second year,
$400 at the end of the third year,
$400 at the end of the fourth year,
$300 at the end of the fifth year.
a. Find the present value if the interest rate is 8 percent.
b. What would happen to the present value of this stream of cash flows if the interest rate were 0 percent?
