You are promised a series of cash flows with the first cash flow of $1000 starting next year.

The cash flow will grow at a constant rate of 5% per year. You will receive a total of 10 annual cash flows. What would you pay for this opportunity if you are required rate of return of 8%?

Answer rating: 100% (QA)

To calculate the present value of the cash flows we can use the formula for the present value of a g... View the full answer