The following cash-flow streams need to be analyzed:
END OF YEAR
CASH-FLOW
STREAM
$1
$2
$3
$4
5
W
100
200
300
1,$300
X
600
–
Y
11,200
Z
$200
$500
0,300
a. Calculate the future (terminal) value of each stream at the end of year 5 with a compound annual interest rate of 10 percent.
b. Compute the present value of each stream if the discount rate is 14 percent.
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