Question
a. Below is a series of cash flows these are the amounts that you expect to receive each year from an investment opportunity. This opportunity
a. Below is a series of cash flows these are the amounts that you expect to receive each year from an investment opportunity. This opportunity is renting out a piece of equipment. If your expected return on a similar investment is 9%, what is the maximum amount you should pay (today) for the equipment you intend to rent out?
Year Cash Flow 1 $18,000 2 10,000 3 0 4 21,000
b. If, instead, you were to receive $21,000 in year 1 and $18,000 in year 4, would this change the amount you would be willing to pay for the equipment - explain answer them in excel platform
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