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What is the present value of this cash flow pattern

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Question - Anna's son, Steven will start college in 10 years. Tuition costs $40,000 today, increasing at an annual rate of 5.0%. Anna wants to earn 3.8% annually on her investments. If she makes an initial investment one year from now, and annual additions at the end of each year until Steven starts college, what is the size of the annual (level) investments she must make to fund 4 years of Steven's college education?

Your client has been offered the opportunity to invest in a project that will pay $1,651 per year at the end of years one through three and $12,926 per year at the end of years four and five. If the appropriate after-tax rate of return is 17.3 percent per year, what is the present value of this cash flow pattern?

Reference no: EM133085906

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