A private company undertakes a five-year project that requires some annual payments

Economics Aug 22, 2020

A private company undertakes a five-year project that requires some annual payments. The payment for the first year is $2,000. The payment will then increase by 5% each subsequent year. The interest rate is fixed at 5% per year. What is the value of this cash flow as of now?

Question options:

$9,328

$9,524

$9,442

$9,112

$10,226

with explanation please

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