Can somebody help with this problem? Please use cash flow diagram. I keep findin

Question

Can somebody help with this problem? Please use cash flow diagram. I keep finding different answer from the one given.. Don spends $5000 now for an investment that pays him $600 each year for 10 years At the end of the tenth year, he sells this investment and receives $1000 With a 14 percent per year interest rate, what equal annual flow is equivalent to this investment (The investment is the entire package of cash flows: spending $5000 now, getting back $600 per car. and getting $ 1000 at year Costs are negative, profits positive. $-306.84/year

Explanation / Answer

First two handy equations:

PVA = PMT [(1+r)n - 1] / [r(1+r)n]

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