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Daigo Dojima recently invested $5,500 in a project that is promising to return 2.25 percent per year. The cash flows are expected to be as
Daigo Dojima recently invested $5,500 in a project that is promising to return 2.25 percent per year. The cash flows are expected to be as follows:
End of Cash
Year Flow
1 $1000
2 950
3 875
4 ???
5 850
Note that the 4th year cash flow is unknown. Assuming the present value of this cash flow stream is $5,500 (that is, CF0 = -5500), what is the missing cash flow value (that is, what is the cash flow at the end of the 4th year)?
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