For an initial investment of $10,000,suppose a company guarantees the following cash flows at the end of the indicated years:
Year Cash Flow
1 $4000
3 $8000
Assume an interest rate of 5% compounded annually.(a)Determine the net present value of the cash flows.(b)Is the investment profitable?

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The Answer of For an initial investment of $10,000,suppose a company guarantees the following cash flows at the end of the indicated years:
Year Cash Flow
1 $4000
3 $8000
Assume an interest rate of 5% compounded annually.(a)Determine the net present value of the cash flows.(b)Is the investment profitable?

For an Initial Investment of $10,000,suppose a Company Guarantees the Following