Calculate the smallest that would entice you to invest

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An investment has a cost of $2500. The investment will have a payout of X at the end of the first year. This initial payout X will grow at the rate of 12% per year for the next 2 years, then by 9% per year for the next 2 years, and then at the rate of 6% per year for the following 2 years. You believe the riskiness of this investment is 8%.

a. Calculate the smallest X that would entice you to invest.

Reference no: EM131977625

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