Question 4 (15) An investment promises the following cash flows; Year 1: 300 Year 2:...
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Question 4 (15) An investment promises the following cash flows; Year 1: 300 Year 2: 500 3: 700 4: 1000 5:1250 (a) Assuming an interest rate of 8% for all cash flows, what is the value of the investment today. (6) (b) What is the present value of a 7-year annuity, if the annual interest is 8.5%, and the annual payment is 10,000? (4) (c) Calculate the expected periodic payment for an annuity that costs 240,000 and produces cash flows over 20 years with a rate of 11%
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