How cash series of flows are economically equivalent


Problem: You anticipate a cash flow of $700 at the end of year 1, $500 at the end of year 2, and $300 at the end of year 4. What is the annual equivalent of the cash flow for years 1 through 4? In other words, what constant value "A" could you receive at the end of years 1-4 such that the two cash series of flows are economically equivalent? The interest rate is 10% annual compounded annually.

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Microeconomics: How cash series of flows are economically equivalent
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