Welcome to Westonci.ca, where finding answers to your questions is made simple by our community of experts. Our platform connects you with professionals ready to provide precise answers to all your questions in various areas of expertise. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.
Sagot :
Answer:
$56,861.80
Explanation:
The maximum price an investor would pay an investment today is the present value of the investment's future cash flows discounted by the opportunity cost of capital of 10%.
Present value of a future cash flow=future cash flow/(1+cost of capital)^n
n refers to the period in which the cash flow is expected , for instance,for year 1 cash flow n is 1, 2 for year 2 and so on.
PV=$15,000/(1+10%)^1+$15,000/(1+10%)^2+$15,000/(1+10%)^3+$15,000/(1+10%)^4+$15,000/(1+10%)^5
PV=$56,861.80
We appreciate your time. Please come back anytime for the latest information and answers to your questions. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.
