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Net Present Value – Uneven Cash Flows

Some net present value questions provide uneven cash flows. For example, a 3-year project provides $100,000 in year 1, $150,000 in year 2, and $200,000 in year 3. We can’t use the present value of an annuity, because the amounts are different each year. Instead, we have to calculate the present value of the lump sum for each of the three years.