You Are Offered a Chance to Buy an Asset for $7

Multiple Choice

You are offered a chance to buy an asset for $7, 250 that is expected to produce cash flows of $750 at the end of Year 1, $1, 000 at the end of Year 2, $850 at the end of Year 3, and $6, 250 at the end of Year 4.What rate of return would you earn if you bought this asset?

A) 4.93%
B) 5.19%
C) 5.46%
D) 5.75%
E) 6.05%