Present value of uneven cash flows ba ii plus | FIN-ED
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Present value of uneven cash flows ba ii plus | FIN-ED
In this video, we are going to learn the present value and future value calculations of uneven cash flow streams. Although calculating present value using a financial calculator is relatively straightforward, calculating future value is a little bit tricky. We are going to use a simple numeric example and Texas BA II Plus financial calculator.
Example:
An investment will pay $150 at the end of each of the next 3 years, $250 at the end of year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? And Its future value?
Source: Fundamentals of Financial Management (Concise Edition) Brigham and Houston
Chapter 5: Time Value of Money
Problem: 5-7
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