Mixed stream
from class: Principles of Finance Definition A mixed stream involves a series of cash flows that are not uniform in amount or frequency. These cash flows can vary over different periods and require specific valuation techniques to determine their present or future value.
congrats on reading the definition of mixed stream . now let's actually learn it.
Predict what's on your test 5 Must Know Facts For Your Next Test Valuing a mixed stream often requires calculating the present value of each individual cash flow separately. Mixed streams can include both inflows and outflows, making it essential to track net cash flows accurately over time. To analyze a mixed stream, you need to discount each cash flow back to its present value using the appropriate discount rate. The complexity of a mixed stream contrasts with annuities, where payments are equal and regular. Understanding how to handle mixed streams is crucial for accurate financial planning and investment analysis. Review Questions How do you calculate the present value of a mixed stream of cash flows? What distinguishes a mixed stream from an annuity? Why is it important to use the appropriate discount rate when valuing a mixed stream?
"Mixed stream" also found in:
© 2024 Fiveable Inc. All rights reserved. AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.