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%?
Value of Income Stream = PV of CFs from it.
|Year||CF||PVF @6.5%||Disc CF|
|Value of Income Stream||63516.9|
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