Answer:
$56,861.80
Explanation:
The maximum price an investor would pay an investment today is the present value of the investment's future cash flows discounted by the opportunity cost of capital of 10%.
Present value of a future cash flow=future cash flow/(1+cost of capital)^n
n refers to the period in which the cash flow is expected , for instance,for year 1 cash flow n is 1, 2 for year 2 and so on.
PV=$15,000/(1+10%)^1+$15,000/(1+10%)^2+$15,000/(1+10%)^3+$15,000/(1+10%)^4+$15,000/(1+10%)^5
PV=$56,861.80
