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Explain what is present value of the investment cash flows

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An investment makes annual payments. The first payment of $300 is due in one year at t=1. Payment grow at a rate of 15.0% annually until t=24. Payments then are stable until t=35. Afterwards, payments grow at a rate of 2.0% annually (the payment at t=36 is 2.0% bigger than the payment at t=35 and are paid in perpetuity.

Question A) What is the cash flow at t=36? (report the t=36 value).(Round to the nearest cent.)

Question B) What is the present value of the investment's cash flows at an annual discount rate of 11.0% ?(Round to the nearest cent.)

Reference no: EM132653254

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