An investment is scheduled to pay $1,000 one year from now; $2,000 two years from now;...

An investment is scheduled to pay $1,000 one year from now; $2,000 two years from now; $3,000 three years from now, and this pattern is expected to remain the same in perpetuity (i.e., $1,000 on t=4; $2,000 on t=5; $3,000 on t=6; etc.). If the discount rate on the project is 8% (effective annual rate), what is the present value of the investment.

A. $79,080

B. $75,050

C. $28,306

D. $24,360

Expert Solution

jeff jeffy answered 1 year ago

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