# 6. Now consider the uneven cash flow stream stemming from the lease agreementgiven in the case.A. co 1 answer below »

6. Now consider the uneven cash flow stream stemming from the lease agreementgiven in the case.A. cost rate is 10 percent annually?What is the present (Year 0) value of the annual lease cash flows if the opportunityB. What is the future value of this cash flows are invested at 10 percent annually? What is the present value of this future value when discounted at 10 percent? What does this result indicate about the consistency inherent in time value analyses?C. Does the office renovation and subsequent lease agreement appear to be a good investment for the company?(Hint: compare the cost of renovation with the present value of the lease payments. Use a 10 percent discount rate for the analysis.)7. Now assume that it is five years late and the company is unable to accumulate the $200,000 needed to make the software purchase. Instead, it is forced to borrow the $200,000. The loan calls for repayment in equal annual installments over a four- year period, with the first payment due at the end of one year, assuming that the company can borrow the funds at a 10 percent rate, what amount of interest and principal will be repaid at the end of each year of the load? 8. Throughout this case, you have been either discounting or compounding cash flows.many financial analyses, such as bond refunding decisions, capital investment decisions, and lease decisions, involve discounting projected future cash flows. What is the appropriate rate in such situations? What factors influence the value of this rate?