Find the Present Value of an Income Stream Which Has

Multiple Choice

Find the present value of an income stream which has a negative flow of R100 per year for 3 years, a positive flow of R200 in the 4th year, and a positive flow of R300 per year in Years 5 through 8.The appropriate discount rate is 4 percent for each of the first 3 years and 5 percent for each of the later years.Thus, a cash flow accruing in Year 8 should be discounted at 5 percent for some years and 4 percent in other years.All payments occur at year-end.

A) R528.21
B) R1,329.00
C) R792.49
D) R1,046.41
E) R875.18