Investment Cash Flow Assignment | Homework For You
June 8th, 2020
You are negotiating to make a 7-year loan of $25,000 to Breck Inc. To repay you, Breck will pay $2,000 at the end of Year 1, $5,000 at the end of Year 2, and $7,000 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of each year from Year 4 through Year 7. Breck is essentially riskless, so you are confident the payments will be made. You regard 7.5% as an appropriate rate of return on a low risk but illiquid 7-year loan. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?Get Finance homework help today
