8.) You are evaluating an investment that will provide the cash flows listed below at the end of each year. You believe that you should earn 11.50% percent compounded  annually on this investment. How much would you be willing to pay for this investment?                                                                                                                                                                                     

                                 

                                                                                                                                                                    

 

                               Year               1                          2                        3                            4                             5                                                                                       

 

                              CFs         200,000               225,000               275,000               325,000               3,500,000                                                                                      

                                                                                                                                                                                                  

                              I                                                                                                                                                                   

                              PV         

Answer rating: 100% (QA)

The formula to calculate the Present Value PV of an annuity is PV PMT x 1 1 rn r Where PV is the pre... View the full answer