An investor is evaluating an investment that pays nothing for four years, but then pays the...
An investor is evaluating an investment that pays nothing for four years, but then pays the following stream of cash flows starting in Year 5:
$313 in Year 5 $691 in Year 6 $338 in Year 7 At an annual interest rate of 6%, the present value of the stream of cash flows is closest to:
Enter your answer to the nearest dollar without a leading dollar sign or commas.
Homework Answers
Present value=Cash flows*Present value of discounting factor(rate%,time period)
=313/1.06^5+691/1.06^6+338/1.06^7
which is equal to
=946(Approx).
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