Consider the streams of income given in the following table:a. Find the present value of each income stream, using a discount rate of 4%, then repeat those calculations using a discount rate of 8%.b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $14,000 in each case.a. The present value of income stream A. using a discount rate of 4% is §.(Round to the nearest cent)Data tableIncome StreamEnd of YearA$5,000$4,000$3,000$2,000$2,000$3,0001$4,0004$5,000Total$14,000$14,000(Click on the icon located on the top-right corner of the datatable below in order to copy its contents into a spreadsheet.)Clear allCheck answerHelp r

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Consider the streams of income given in the following table: a. Find the present value of each income stream, using a discount rate of 4%, then repeat those calculations using a discount rate of 8%. b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $14,000 each case. a. The present value of income stream A. using a discount rate of 4% is $' (Round to the nearest cent.). Data table Income Stream B End of Year $5,000 $4,000 $3,000 $2,000 $14,000 $2,000 $3,000 $4,000 $5,000 2 3 4. Total $14,000 (Click on the icon located on the top-right corner of the data

Consider the streams of income given in the following table: a. Find the present value of each income stream, using a discount rate of 4%, then repeat those calculations using a discount rate of 8%. b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $14,000 each case. a. The present value of income stream A. using a discount rate of 4% is $' (Round to the nearest cent.). Data table Income Stream B End of Year $5,000 $4,000 $3,000 $2,000 $14,000 $2,000 $3,000 $4,000 $5,000 2 3 4. Total $14,000 (Click on the icon located on the top-right corner of the data

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter11: Venture Capital Valuation Methods

Section: Chapter Questions

Problem 7DQ

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pre value of each income stream, using a discount rate of 4%, then repeat those calculations using a discount rate of 9%. b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $18,000 in each case. a. The present value of income stream A, using a discount rate of 4% is $. (Round to the nearest cent.) Data table End of Year 1 2 3 4 Income Stream A $6,000 $5,000 $4,000 $3,000 $18,000 8 $3,000 $4,000 $5,000 $6,000 $18,000 Total (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) X
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