Suppose you are looking at the following possible cash flows:
• Year 1 CF = $100;
• Years 2 and 3 CFs = $200;
• Years 4 and 5 CFs = $300.
• The required discount rate is 7%.
• What is the value of the cash flows at year 5?
• What is the value of the cash flows today?
• What is the value of the cash flows at year 3?