Question
After negotiations, you purchased a 20-year investment that pays you $100 at the end of year one, $500 at the end of year 2, and
After negotiations, you purchased a 20-year investment that pays you $100 at the end of year one, $500 at the end of year 2, and $750 at the end of year 3. Additionally, the investment pays you some fixed cash flow, lets call it X, at the end of each of the remaining seventeen years. You pay $5,544.87 for this investment. The required return on similar investments is 9%. Calculate the annual cash flow that you are going to receive at the end of the final seventeen years; in other words, find X.
a.736
b.650
c.625
d.675
e.521
P.S. it is a MCQ question, so dont list all the numbers in a table, are there other more efficient methods?
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