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Uneven Cash Flow Stream
Use the table below to answer the following:
- What are the present values of the following cash flow streams if they are compounded at 5 percent annually?
- What are the PVs of the streams at 0 percent compounded annually?
| 0 | 1 | 2 | 3 | 4 | 5 | |
| Stream A | $0 | $100 | $400 | $400 | $400 | $300 |
| Stream B | $0 | $300 | $400 | $400 | $400 | $100 |
The concepts of cash-flow instances and cash-flow streams are used to describe the business perspective of a proposal. A cash-flow instance is a specific amount of money flowing into or out of the organization at a specific time as a direct result of some proposal.
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