A friend of yours recently started a caf business and he is now looking to expand. For this purpose, he is looking for investors who can join him and has promised the following cash inflows, given an initial investment of $18,000:

$2,000 at the end of Year 0.5

$3,500 at the end of Year 1

$4,500 at the end of Year 1.5

Your friend has also promised that he will return 85% of the initial investment at the end of Year 1.5. What would this investment be worth to an investor today given that the stated annual interest rate is 4.5%, compounded semi-annually. Would you be willing to invest in your friends business?