posted by Peter on .
John Keene recently invested $3,500 in a project that is promising to return 10.75 percent per year.
The cash flows are expected to be as follows:
End of Cash
Note that the 3rd year cash flow is unknown. Assuming the present value of this cash flow stream is $3,500 (that is, CF0 = -3500), what is the missing cash flow value (that is, what is the cash flow at the end of the 3rd year)?