Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year 1, $12,500; year 2, $10,000; year 3, $7,500; year 4, $5,000; year 5, $2,500; year 6, $0; and year 7, $12,500. walt believes that he should earn an annual rate of 8 percent on this investment. how much should he pay for this investment?

$38,771.44

To achieve at least the 8% rate Walt can pay until this amount.

Explanation:

The goal would be to calcualte the present value for each cashflow using the expected rate of 8%

For example year 3

Then we add each cashflow, to get the present value of the project.

To achieve at least the 8% rate Walt can pay until this amount.

answer; someone must cover the cost associated with the provision of scarce goods in both sectors;