Question
Great Limited is evaluating an investment that will provide the following returns at the end of the following years; YEAR CASHFLOW (P) 1 8 000
Great Limited is evaluating an investment that will provide the following returns at the end of the following years;
| YEAR | CASHFLOW (P) |
| 1 | 8 000 |
| 2 | 3 000 |
| 3 | 100 |
| 4 | 15 000 |
| 5 | 12 000 |
The company believes that it should earn an annual rate of 10% on its investment.
Required: i) How much should the company pay for this investment?
ii) How much would the investment be when it matures after 5 years?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. Mcguigan, William J. Kretlow
9th Edition
032416470X, 9780324164701
