year cash flow 0 $2000 1 2000 2 0 3 1500 4 2500 5 4000 a. what is the present (y

Question

year cash flow
0 $2000
1 2000
2 0
3 1500
4 2500
5 4000

a. what is the present (year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?
b. what is he value of the cash flow stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually?
c.what cash flow today (year 0), in lieu of the $2000 cash flow, would be needed to accumulate $20000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)
d.time value analysis involves either discounting or compounding cash flows. Many healthcare financial management decisions, such as bond refunding, capital investment, and lease versus buy, involve discounting projected future cash flows. what factors most executives consider when choosing a discount rate to apply to forecasted cash flows?

Explanation / Answer

a b c Cash flow PVIF @10% FVIF @10% Present Value Future Value 2000 1.0000 1.6105 2000.00 3221.02 8506.8 2000 0.9091 1.4641 1818.18 2928.2 2928.2 0 0.8264 1.3310 0.00 0 0 1500 0.7513 1.2100 1126.97 1815 1815 2500 0.6830 1.1000 1707.53 2750 2750 4000 0.6209 1.0000 2483.69 4000 4000 a PV 9136.37 b FV 14714.22 c Cash Flow today 5282.05 As you should not ask more then one question in a single post Thank you a b c Cash flow PVIF @10% FVIF @10% Present Value Future Value 2000 1.0000 1.6105 2000.00 3221.02 8506.8 2000 0.9091 1.4641 1818.18 2928.2 2928.2 0 0.8264 1.3310 0.00 0 0 1500 0.7513 1.2100 1126.97 1815 1815 2500 0.6830 1.1000 1707.53 2750 2750 4000 0.6209 1.0000 2483.69 4000 4000 a PV 9136.37 b FV 14714.22 c Cash Flow today 5282.05

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