a 15 year constant cash flow of $1200 starts from today.

i. what is the present value if the ruling interest is 20%?
ii. what would be the present value if the cash flow were to start at the beginning of year 3?

To find the present value of a constant cash flow, we need to use the formula for present value of an annuity.

The formula for present value of an annuity is:
PV = C * [(1 - (1 + r)^(-n)) / r]

Where:
PV = Present Value
C = Cash Flow amount
r = Interest rate
n = Number of periods

i. To find the present value if the cash flow starts from today, we know:
Cash Flow (C) = $1200
Interest Rate (r) = 20% or 0.20
Number of Periods (n) = 15 years

Substituting these values into the formula, we have:
PV = $1200 * [(1 - (1 + 0.20)^(-15)) / 0.20]

Calculating this expression will give you the present value if the interest rate is 20%.

ii. To find the present value if the cash flow starts at the beginning of year 3, we need to adjust the number of periods. Since the cash flow starts 2 years later, the new number of periods (n) would be 15 minus 2, which is 13.

Using the new number of periods (n = 13), we can substitute this value into the formula:
PV = $1200 * [(1 - (1 + 0.20)^(-13)) / 0.20]

Calculating this expression will give you the present value if the cash flow starts at the beginning of year 3.