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You are trying to put a value on a liability. The interest rate is 12 percent, and the cash flows are: Year 1, 2, 3,
You are trying to put a value on a liability. The interest rate is 12 percent, and the cash flows are: Year 1, 2, 3, 4 and 5: $100,000 annually per year. Year 5: $200,000 Year 6 and 7: $300,000 per year. What is the value of the liability today (t=0)? You must show the set-up of the solution and the
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