You have been offered a 4-year investment at a price of $108,792.08.  It will pay $57,500 at the end of Year 1 and a fixed but currently unspecified cash flow, X, at the end of Years 2, 3, and 4.  You regard 10% as an appropriate rate of return for this 4-year investment.  What cash flow must the investment provide at the end of each of Years 2, 3, and 4, that is, what is X? Please show detailed solutions.

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To determine the cash flow X that must be provided at the end of each of Years 2 3 and 4 for the inv... View the full answer