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Posted: December 1st, 2022
Consider an uneven cash flow streama. What is the present (Year 0) value of the cash flow stream ifthe opportunity cost rate is 10 percent?b. What is the value of the cash flow steam at the end of Year 5 ifthe cash flows are invested in a accounty that pay 10 percentannually?c. What cash flow today (Year 0) in lieu of the $2000 cash flowwould be needed to accumulate $20000 at the end of Year 5? (Assumethat the cash flows for Years 1 through 5 remain the same).d. Time value analysis involves either discounting or compoundingcase flows. Many healthcare financial management decisions such asbond refunding capital investment and lease versus buy involvediscounting projected future cash flows. What factors mustexecutives consider when choosing a discount rate to apply toforecasted cash flows?Year Cash flow0 $20001 20002 03 15004 25005 4000
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