What is a fair price for the investment

Reference no: EM13258247

An investment promises to pay you exactly $10,000, exactly 4 years from today, and the investment (in addition) pays you (a second cash flow of) exactly $110,000 in exactly 5 years from today. The required rate of return is 10%. What is a fair price for the investment - assuming the discount rate and expected cash flows don't change - exactly 3 years from today. (In other words, what would the investment sell for in 3 years?

Reference no: EM13258247

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