Question
1) Orange Valley Media just bought a new medical clinic. To pay for the medical clinic, the company took out a loan that requires Orange
1) Orange Valley Media just bought a new medical clinic. To pay for the medical clinic, the company took out a loan that requires Orange Valley Media to pay the bank a special payment of 10,710 dollars in 4 month(s) and also pay the bank regular payments. The first regular payment is expected to be 2,330 dollars in 1 month and all subsequent regular payments are expected to increase by 0.68 percent per month forever. The interest rate on the loan is 1.4 percent per month. What was the price of the medical clinic?
2) An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 2 years (s) from today is expected to be 1,850 dollars and the cash flow expected in 9 years from today is expected to be 3,480 dollars. What is the cash flow expected to be in 6 years from today?
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