Economically equivalent to the preceding cash flow

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Reference no: EM131817615

The interest rate is 8.6% compounded annually. Consider the following cash flow.

Year 0: (-$72)

Year 1: $0

Year 2: $105

Year 3: $140

Year 4: $197

Year 5: $238

Find the value of A --where you receive A 6 times (years 0-5)--that is economically equivalent to the preceding cash flow. HINT: This is different than the normal equal payment series because you are also receiving A in year 0.

Reference no: EM131817615

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