Can anyone help me answer this question?
Suppose an investment opportunity with a cash flow of $3000 each year for the first 3 years, and $2000 from year 4 in perpetuity. With initial investment of $18000. What is the NPV of the investment if r=10% ?
I know that you have to derive the first 3 years and then at year 3 using the formula C/r, then derive the PV. But i still get the wrong answer.
Help? ;S