Question: You have won a contest Your prize consists of 8
You have won a contest. Your prize consists of 8 payments of $5,000 made at the end of years 3-10 (assume that "right now" equals time zero), or a one-time lump-sum cash payment made at time zero. You have a 10% discount rate. What lump-sum cash payment at time zero is economically equivalent to the sequence of 8 payments of $5,000?
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