What cash flow must the investment provide

Reference no: EM13299145

You are negotiating to make a 7 year loan of $25,000 to breck inc. 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 each year from year 4 through year 7. Breck is essentially riskless, so you are confident the payments will be made. Your regard 8% as an appropriate rate of return on a low risk but illiquid 7 year loan. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?

Reference no: EM13299145

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