You are considering the purchase of an investment. What is the MOST you would be willing to pay for this investment?
You are considering the purchase of an investment that would pay you $5,000 per year for Years 1 5, $3,000 per year for Years 6 8, and $2,000 per year for Years 9 and 10. If you require a 14 percent rate of return, and the cash flows occur at the end of each year, then what is the MOST you would be willing to pay for this investment?
...m the investment.
Present Value = 5,000/1.14 + 5,000/1.14^2 + ...