madysonrose1007
madysonrose1007
18.06.2020 • 
Business

A series of cash flows may not always be necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money applies to uneven cash flows as well. Consider the following:Year 1 $250,000Year 2 $20,000Year 3 $180,000Year 4 $300,000Year 5 $350,000Year 6 $725,000The CFO of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar?a. $1,535,988b. $1, 625,000c. $450,000d. $1,825,000

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