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What cash flow must the investment provide

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Question - You have been offered a 5-year investment at a price of $83,777.68. It will pay $10,250 at the end of Year 1, $21,750 at the end of Year 2, and a fixed but currently unspecified cash flow, X, at the end of Years 3 through 5. The payer is essentially riskless, so you are sure the payments will be made, and you regard 3% as an appropriate rate of return on riskless 5-year investments. What cash flow must the investment provide at the end of each of the final 3 years, that is, what is X?

Reference no: EM133127164

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