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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
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Present values of single amounts and streams You have a choice of accepting either of two 5-year cash flow streams or single amounts. One cash flow stream is an ordinary annuity, and the other is a mixed stream. You may accept alternative A or B—either as a cash flow stream or as a single amount. Given the cash flow stream and single amounts associated with each (see the accompanying table), and assuming a 9% opportunity cost, which alternative (A or B) and in which form (cash flow stream or single amount) would you prefer?
| Â |
Cash flow stream |
|
|
End of year |
Alternative A |
Alternative B |
|
1 |
$700 |
$1,100 |
|
2 |
700 |
900 |
|
3 |
700 |
700 |
|
4 |
700 |
500 |
|
5 |
700 |
300 |
| Â |
Single amount |
 |
|
At time zero |
$2,825 |
$2,800 |
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