Laura Drake wishes to estimate the value of an asset expected to provide cash inflows of...

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Finance

Laura Drake wishes to estimate the value of an asset expected toprovide cash inflows of $2,500 for each of the next 4 years and?$12,328 in 5 years. Her research indicates that she must earn 4?%on? low-risk assets, 9?% on? average-risk assets, and 13?% on?high-risk assets.
a.??Determine what is the most Laura should pay for the asset ifit is classified as? (1) low-risk,? (2) average-risk, and? (3)high-risk.
b.??Suppose Laura is unable to assess the risk of the asset andwants to be certain? she's making a good deal. On the basis of yourfindings in part a?, what is the most she should? pay? Why?
c. All else being the? same, what effect does increasing riskhave on the value of an? asset? Explain in light of your findingsin part a.

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Answer a1 Lowrisk most Laura should pay 19207462 Average risk most Laura should pay 16111653 High risk most Laura should pay 1412732WorkingsAnswer bIf Laura is See Answer

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Laura Drake wishes to estimate the value of an asset expected toprovide cash inflows of $2,500 for each of the next 4 years and?$12,328 in 5 years. Her research indicates that she must earn 4?%on? low-risk assets, 9?% on? average-risk assets, and 13?% on?high-risk assets.a.??Determine what is the most Laura should pay for the asset ifit is classified as? (1) low-risk,? (2) average-risk, and? (3)high-risk.b.??Suppose Laura is unable to assess the risk of the asset andwants to be certain? she's making a good deal. On the basis of yourfindings in part a?, what is the most she should? pay? Why?c. All else being the? same, what effect does increasing riskhave on the value of an? asset? Explain in light of your findingsin part a.