Consider the following case:The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau

$1,051,448Explanation:Present value is the sum of discounted cash flows.present value can be calculated using a financial calculator Cash flow in year 1 =  $250,000Cash flow in year 2 = $37,500Cash flow in year 3 =  $180,000Cash flow in year 4 =  $300,000Cash flow in year 5 =  $550,000 I = 6.5%Present value = $1,051,448To find the PV using a financial calculator:1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  3. Press compute  

1                      Purple Lion Beverage CompanyYear          Cash flows($)                        Dfc (6.5%)                  Present Value($)  1                   250,000                             0.9389                         234,741.78 2                     37,500                              0.8817                           33,062.22 3                    180,000                            0.8278                           149,012.84 4                    300,000                            0.7773                         233,196.93 5                    550,000                           0.7299                         401,434.46Total Present value =                                                                 1,051,448.23 (D)2) Annuity Payment - You recently moved to a new apartment and signed a contract to pay monthly rent to your landlord for a year.Uneven Cash flow - SOE Corp. hires an average of 10 people every year and matches the contribution of each employee toward his or her retirement fund.Uneven Cash flow - Franklinia Venture Capital (FVC) invested in a budding entrepreneur’s restaurant. The restaurant owner promises to pay FVC 10% of the profit each month for the next 10 years.Annuity Payment - You have committed to deposit $600 in a fixed interest–bearing account every quarter for four years.Explanation:1) Dfc i.e. discount factor is calculated by - 1 / (1 + r)ⁿwhere r is the rate at 6.5%and n is the time period - 1,2,3,4,5for year 1 = 1 / (1 + 0.065)¹ = 1/1.065 = 0.9389for year 2 = 1 / (1 + 0.065)² = 1/1.1342 = 0.8817for year 3 = 1 / (1 + 0.065)³ = 1/1.2079 = 0.8278 for year 4 = 1 / (1 + 0.065)⁴ = 1/1.2865 = 0.7773for year 5 = 1 / (1 + 0.065)⁵ = 1/1.3701 = 0.7299while Present value is gotten by multiplying annual cash flow by the discount factor2) a) Monthly rental payment is normally for the same amount i.e it is an annuity paymentb) The contribution of each employee would vary and not always be the same and as such it would be an uneven cash flowc) The profit from the restaurant would not always be the same for every month and as such the payment of 10% on profit would also vary per monthd) The deposit of $600 is for a fixed amount and such is an annuity paymentNote: an annuity is a fixed payment made at equal intervals while uneven cash flows as cash flows that vary with amount paid

answer: Explanation:3333333333333333333

The sum of the present values of the stream of cash flows is $1,011,772.58Explanation:We need to compute the present value of the cash flows separately for each amountThe first cash flow is occurring at the end of the first yearWe use the formula PV = FV/(1+i)^n   Where PV = Present Value, FV = Future value, i = Interest rate, which is the rate at which the cash flows are to be discounted and n = the year in which the cash flow occursPlugging the values in the formula, we get the present value for the first yearPV = 250,000/(1+0.065)^1 = 250,000/1.065 = 93,896.71= $93,896.71The present values for the successive years are provided as underPV = 20,000/(1+0.065)^2 = 20,000/(1.065)2 = 17,633.1857= $17,633.1857PV = 180,000/(1+0.065)^3 =180,000/(1.065)3 = 149,012.8365= $149,013.8365PV = 450,000/(1+0.065)^4 =450,000/(1.065)4 = 349,795.3909= $349,795.3909PV = 550,000/(1+0.065)^5 =550,000/(1.065)5 = 401,434.4601= $401,434.4601Adding up the present values for each of the years, we obtain the present value of the cash flow stream93,896.71+17,633.1857+149,013.8365+349,795.3909+401,434.4601 = $1,011,773,.58 approximately (only the final answer is rounded off to two decimal points)The solution in word format is also attached here