Solution-Appropriate rate of return on riskless

Appropriate rate of return on riskless

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Reference no: EM132951643

You have been offered a 5-year investment at a price of $90,124.45. It will pay $7,725 at the end of Year 1, $15,000 at the end of Year 2, and a fixed but currently unspecified cash flow, X, at the end of Years 3 through 5. The payer is essentially riskless, so you are sure the payments will be made, and you regard 5% as an appropriate rate of return on riskless 5-year investments. What cash flow must the investment provide at the end of each of the final 3 years, that is, what is X?

Reference no: EM132951643

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Appropriate rate of return on riskless

Reference no: EM132951643

Reference no: EM132951643

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