Question

An investment promises the following cash flow stream: Year 0 Year 1 Year 2 Year 3...

An investment promises the following cash flow stream:

Year 0 Year 1 Year 2 Year 3 Year 4
Cashflow 1000 2000 3000 5000

The discount rate is 5%. What is the maximum price that you are willing to pay for this investment now?

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