Problemthe promised cash flows from a three-year investment, Ask an Expert

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Problem:

The promised cash flows from a three-year investment security are $5,000 in Year 1 and $5,600 in Year 3. The cash flow in Year 2 is unknown. The price of this security is $12,515.94.

Required:

Question: If the required rate of return is 12% per year, what must be the amount of the promised cash flow in Year 2?

$4,000
$4,066
$5,100
$5,300
$3,241

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162484

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