Problem
Consider the following uneven cash flow stream:
Year 0: $0
Year 1: $250
Year 2: $400
Year 3: $500
Year 4: $600
Year 5: $600
1) What is the present value if the discount rate is 10 percent?
2) Add a cash outflow (or cost) of $1,000 at Year 0. What is the present value (or net present value) of the total cash flow stream now?