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Nida has been offered an investment that will pay her $500 two years from today. The annual cash flow from the investment will increase by
Nida has been offered an investment that will pay her $500 two years from today. The annual cash flow from the investment will increase by 3 percent per year forever. She knows investments with similar risk earn a return of 8%. Required: (show your work). Determine the maximum Nida should be willing to pay today for this investment. (6 points).
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