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Shaun is considering an investment in a financial instrument that will pay him $800 at the beginning of each year for 5 years. Using a
Shaun is considering an investment in a financial instrument that will pay him $800 at the beginning of each year for 5 years. Using a discount rate of 6.0%, determine what this expected stream of cash flows is worth to Shaun today assuming annual discounting of cash flows. (The answer is $3,572.08, but I am unsure how to arrive at this solution. Please provide a thorough explanation. Thanks! |
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