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you are negotiating to make a 7 year loan of $23,000 to Breck Inc. To repay you, Breck will pay $2,500 at the end of
you are negotiating to make a 7 year loan of $23,000 to Breck Inc. To repay you, Breck will pay $2,500 at the end of Year 1, $5000 at the end of year 2, and $7500 at the end of year 3, plus a fixed but currently unspecified cash flow, X, at the end of Year 4 through 7. Breck is essentially riskless, so you are confident the payment will be made and you regard 8.9% as an appropriate rate of return on low risk 7-year loans. What cash flow must the investment provide at the end of each of the final 4 years, that is what is X?
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