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tresset_1 [31]
3 years ago
8

Find the present value of the following stream of a firm's cash flows, assuming that the firm's opportunity cost is 9 percent.

Business
1 answer:
alex41 [277]3 years ago
3 0

Answer:

The total Present value of the stream of the firm cash flow is $79,348

Explanation:

Complete Question is as follows "Find the present value of the following stream of cash flows assuming that the firms opportunity costs is 9 percent.

1-5 years - $10,000 - Annual

6-10 years - $16,000 - Annual

Year  Cash flow$      PVF at 9%        Present Value$

                              [ 1/ (1+0.09)^n ]    

  1        10000             0.9174                   9174

  2       10000              0.8417                  8417

  3       10000              0.7722                 7722

  4       10000              0.7084                 7084

  5       10000              0.6499                 6499

  6       16000              0.5963                 9540.8

  7       16000               0.547                   8752

  8       16000               0.5019                 8030.4

  9       16000               0.4604                7366.4

 10       16000               0.4224                <u>6758.4 </u>

Total                                                          <u>$79,348</u>

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Learn more about Utility cost, refer to the link:

brainly.com/question/8212077

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