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Consider an investment that pays 200 one year from now with

Question: Consider an investment that pays $200 one year from now, with cash flows increasing by $200 per year through year 4. If the interest rate is 12%, what is the present value of this stream of cash flows?

If the issuer offers this investment for $1,500, should you purchase it? Why or why not?

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Accounting Basics: Consider an investment that pays 200 one year from now with

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