A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case:
The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years:

Annual Cash Flows
Year 1 Year 2 Year 3
100,000 37,500 330,000

The CFO of the company believes that an appropriate annual interest rate on this investment is 4%.
What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar?

a) 1, 450,000 b) $424, 194 c) $1, 817, 500 d) $467, 500

Which of the following would classify as a general education requirement

Emery pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. emery uses 825 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $48 per order. the cost schedules of two suppliers are as follows: vendor 1 vendor 2 quantity price/lb quantity price/lb 1-499 $17 1-399 $17.10 500-999 $16.75 400-799 $16.85 1000+ $16.50 800-1199 $16.60 1200+ $16.25 (a) what is the economic order quantity for each supplier? (b) what quantity should be ordered and which supplier should be used? (c) the total cost for the most economic order sire is $

Which of the following would cause a shift to the right of the supply curve for gasoline? i. a large increase in the price of public transportation. ii. a large decrease in the price of automobiles. iii. a large reduction in the costs of producing gasoline