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Travis is offered the following income stream of payments: $10,000 in one year, $20,000 in two...

Travis is offered the following income stream of payments: $10,000 in one year, $20,000 in two years, and 50,000 in five years.  How much should Travis be willing to pay for this income stream if his opportunity cost of capital is 6.5%?

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Answer #1

Value of Income Stream = PV of CFs from it.

Year CF PVF @6.5% Disc CF
1 $ 10,000.00     0.9390 9389.671
2 $ 20,000.00     0.8817 17633.19
3 $               -       0.8278 0
4 $               -       0.7773 0
5 $ 50,000.00     0.7299 36494.04
Value of Income Stream 63516.9

Pls

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