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A stream of payments over a 5-year period have a present worth of $100,000. Payments in...

A stream of payments over a 5-year period have a present worth of $100,000. Payments in years 1, 4 and 5 are $15,000, $30,000, and $35,000, respectively. The value in years 2 and 3 must be determined. Year 3 is twice year 2. What are the values of year 2 and year 3’s payments? No Interest. PLEASE INCLUDE A CASH FLOW DIAGRAM or I will not rate. Thank you!

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Answer #1

Answer:

Total Payment = 100000
Payment of Year 1, 4 and 5 = 15000+30000+35000 = $ 80000
Balance payment for year 2 and 3 = 100000-80000
    = 20000
Year 2 payment be x
Year 3 Payment = 2 x
Total =x+2x= 3X
20000/3 = 6666.667
Year 2 Payment = 6667
Year 3 Payment = 6667*2 13333

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