George pays 100,000 today for a 4-year investment that returns cash flows of 60,000 at the...

George pays 100,000 today for a 4-year investment that returns cash flows of 60,000 at the end of each years 3 and 4. Suppose that, at 15%, the net present value of George's cash flows is equal to the net present value fo Joe's cash flows, where Joe makes an investment of X one year from today that returns cash flows of 60,000 at the end of each of years 4 and 5. Calculate X.

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Expert Solution

PRESENT VALUE OF CASH FLOW = CASHFLOW/(1+RATE)ⁿ

jeff jeffy answered 1 year ago

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