Problem: An investment promises to pay $6,000 at the end of each year for the next five years and $4,000 at the end of each year for years 6 through 10.
Q1: If you require a 12 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?
Q2: Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 12 percent required rate of return?