Determine the maximum you would be willing to pay

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An investment promises to pay you $270 per year starting in 7 years. The cash flow from the investment is expected to increase by 3 percent per year forever. If alternative investments of similar risk earn a return of 8 percent per year.

Determine the maximum you would be willing to pay for the investment. (Round answer to 2 decimal places, e.g. 125.12. Do not round your intermediate calculations.)

Reference no: EM132382506

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