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You win a prize offered by your bank! They tell you that you can receive a fixed amount per year FOREVER, or you can take the entire full amount of the payments today. If they will pay KD 1200 per year FOREVER, and the current interest rate is 4% per year: a. What is the value of the prize immediately (i.e. one second) after a payment is made? b. What is the value of the prize immediately (i.e. one second) before the payment is made? I You win a prize offered by your bank! They tell you that you can receive a fixed amount per year FOREVER, or you can take the entire full amount of the payments today. If they will pay KD 1200 per year FOREVER, and the current interest rate is 4% per year: a. What is the value of the prize immediately (i.e. one second) after a payment is made? b. What is the value of the prize immediately (i.e. one second) before the payment is made? I
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The options given by the bank are similar to continuous perpetuity or a neverending ser... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
Posted Date:
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