An investment is expected to generate cash flows of $20000 next year (at time t=1), and $10000 in two years at time t=2. After that, the annual cash flows generated by the investment will decrease forever at growth rate of -8% APR compounded annually. What is the present value of this stream of cash flows if r=10% APR compounded

Sep 8, 2023

 

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An investment is expected to generate cash flows of $20000 next year (at time t=1), and $10000 in two years at time t=2. After that, the annual cash flows generated by the investment will decrease forever at growth rate of -8% APR compounded annually. What is the present value of this stream of cash flows if r=10% APR compounded
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