Daigo Dojima recently invested $7520 in a project that is promising to return 3.875 percent per year. The cash flows are expected to be as follows: End of Year 1 2 3 4 5 Cash Flow $1000 950 875 ??? 850 Note that the 4th year cash flow is unknown. Assuming the present value of this cash flow stream is $7520 (that is, CF0= -7520), what is the missing cash flow value (that is, what is the cash flow at the end of the 4th year)?
Daigo Dojima recently invested $7520 in a project that is promising to return 3.875 percent per year. The cash flows are expected to be as follows: End of Year 1 2 3 4 5 Cash Flow $1000 950 875 ??? 850 Note that the 4th year cash flow is unknown. Assuming the present value of this cash flow stream is $7520 (that is, CF0= -7520), what is the missing cash flow value (that is, what is the cash flow at the end of the 4th year)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:49. Daigo Dojima recently invested $7520 in a project that is promising to return 3.875 percent per year.
The cash flows are expected to be as follows:
End of
Year
1
2
3
4
5
Cash
Flow
$1000
950
875
???
850
Note that the 4th year cash flow is unknown. Assuming the present value of this cash flow stream is
$7520 (that is, CF0=-7520), what is the missing cash flow value (that is, what is the cash flow at the
end of the 4th year)?
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