Currently unspecified cash flow

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Reference no: EM131075736

You are negotiating to make a 7-year loan of $26,000.00 to Breck In. To repay you, Breck will pay $2,500 at the end of Year 1, $5,000 at the end of Year 2, and $7,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of Years 4 through 7. Breck is essentially riskless, so you are confident the payments will be made, and you regard 8.9 percent as an appropriate rate of return on low risk 7-year loans. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?

Reference no: EM131075736

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