Hello,
I am working on a unique problem and would like see if I am headed in the right direction.
Ex. 15 yr investment that pays $200 at the end of yr 1, $400 at the end of yr 2, and $600 at the end of yr 3. The investment will pay some additional fixed cash flow, at the end of the remaining 12 years. Cost for the investment is $4400. Required return on similar investments is 8%. I'm looking to calculate the annual cash flow that will receive for those last 12 yrs.
I approached to solve for the FV for the cost of investment and with similar investments rate. N= 15, I = 8, PV= -4400 PMT = 0......FV = 13,957.54
Then I subtracted the known cash flows. $13,957.54 - 200 - 400 - 600 = 13,297.54. Then I divided by the remaining 12 periods. 13,297.54/12= $1,108.12
Am I approaching this correctly or completely off base?
Fred
I am working on a unique problem and would like see if I am headed in the right direction.
Ex. 15 yr investment that pays $200 at the end of yr 1, $400 at the end of yr 2, and $600 at the end of yr 3. The investment will pay some additional fixed cash flow, at the end of the remaining 12 years. Cost for the investment is $4400. Required return on similar investments is 8%. I'm looking to calculate the annual cash flow that will receive for those last 12 yrs.
I approached to solve for the FV for the cost of investment and with similar investments rate. N= 15, I = 8, PV= -4400 PMT = 0......FV = 13,957.54
Then I subtracted the known cash flows. $13,957.54 - 200 - 400 - 600 = 13,297.54. Then I divided by the remaining 12 periods. 13,297.54/12= $1,108.12
Am I approaching this correctly or completely off base?
Fred