You are offered an investment today by your broker. this investment offers the following stream of...
You are offered an investment today by your broker. this investment offers the following stream of cash flows. : Yr1 = $12,000 Yr2 = $20,000 Yr3= $10.000. Yr4= $16,000 IF you require a return of 8% for investments of this type of risk, how much should you pay for the investment today?
Homework Answers
YR CASH FLOW PVF @8% DCF
1 $12000 0.9259 $ 11111
2 $20000 0.8573 $ 17146
3 $10000 0.7938 $ 7938
4 $16000 0.7350 $ 11760
$47955
THEREFORE TOTAL AMOUNT SHOULD PAY FOR INVESTMENT TODAY WILL BE $47955
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