What is cost of an investment that will produce cash flows

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Problem 1: What is the present value of a 7-year annuity of $175 plus an additional lump sum of $1,000 at the end of year 7 if the interest rate is 5.5%?

Problem 2: What is the cost of an investment that will produce cash flows of $250 at the end of the next 5 years, then an extra lump sum payment of $500 at the end of the 5th year at an interest rate of 5%?

Problem 3: How much would you be willing to pay today for an investment that pays the following cash flows at the end of each of the next 4 years if your required rate of return is 9% per year?

Reference no: EM132721572

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