An investment offers $13800 per year for 5 years, with the first payment occurring 8 years...

An investment offers $13800 per year for 5 years, with the first payment occurring 8 years from now. If the required return is 15 percent, what is the value of the investment?

Expert Solution

Discount rate	15.0000%
Cash flows	Year	Discounted CF= cash flows/(1+rate)^year	Cumulative cash flow
-	0	-	-
-	1	-	-
-	2	-	-
-	3	-	-
-	4	-	-
-	5	-	-
-	6	-	-
-	7	-	-
13,800.000	8	4,511.24	4,511.24
13,800.000	9	3,922.82	8,434.07
13,800.000	10	3,411.15	11,845.21
13,800.000	11	2,966.22	14,811.43
13,800.000	12	2,579.32	17,390.75

Value of investment = 17,390.75

jeff jeffy answered 3 years ago

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