Carol Jenkins, a lottery winner, will receive the following payments over the next seven years. She has
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Carol Jenkins, a lottery winner, will receive the following payments over the next seven years. She has been approached by an investor who will pay Carol a lump sum today for the rights to those future cash flows. If she can invest her cash flows in a fund that will earn 10.5 percent annually, how much should Carol require the investor to pay for the cash flows?
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1 3 4 6 7 Year + + + + $200,000 $250,000 $275,000 $300,000 $350,000 $400,000 $550,000 2.
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Expected rate of return i 105 Investment period n 7 year...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
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