Question: A cash-flow generating asset is not expected to make any payments for the coming six years. At the end of year seven, it is expected

  1. A cash-flow generating asset is not expected to make any payments for the coming six years. At the end of year seven, it is expected to generate a cash flow of $2,475. That payment is expected to stay constant in perpetuity. The assets required rate of return is 9% per year. How much will you be willing to pay for the asset today?

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