helpp 4. 7 points. You are offered an investment which will pay you $1000 in one...

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helpp

Answer 1

Answer #1

The amount to be paid for investment is present value of future payment received on investment

Year	Cash flow	Discount factor @ 3.75%	Present value
1	$1,000	0.96386	$963.86
3	$2,000	0.89544	$1,790.88
4	$2,500	0.86307	$2,157.68
			$4,912.41
Thus, one would be willing to pay $4,912.31 for investment

Answer 2

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