You have just purchased an investment that generates the


Question: You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 10.6 percent, compounded annually.

End of year

1. $4,210

2. $1,933

3. $605

4. $3,159

What is the present value of this investment if 10.6 percent per year is the appropriate discount rate?

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Finance Basics: You have just purchased an investment that generates the
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