8

Today is January 1, 2101. You are expecting to receive $500 on December 31, 2101, 5600 on December 31, 2102, and $700 on December 31, 2103. Your cousin offers to buy the rights to these cash flows today. Assuming the appropriate discount rate is 7%, what is the lowest amount you would be willing to take? Walt, don't calculate this - just show the formula set up with the precise numbers we would need to solve this problem. I am NOT looking for financial calculator Input here. (That means putting something like =NPVO) will get no credit.) Be sure to use is where needed