NCE EXAMPLE $6\mathrm{.}4$ Celia Sargent wishes to estimate the value of three assets she is considering investing in: common stock in Michaels Enterprises, an interest in an oil well, and an original painting by a well$-$known artist. Her cash flow estimates for each are as follows:

Stock in Michaels Enterprises: Expect to receive cash dividends of $$300$ per year indefinitely.

Oil well: Expect to receive cash flows of $$2,000$ after $1$ year, $$4,000$ after $2$ years, and $$10,000$ after $4$ years, when the well will run dry.

Original painting: Expect to sell the painting in $5$ years for $$85,000.$

With these cash flow estimates, Celia has taken the first step toward placing a value on each of the assets.