Question: Kelly Green has a contract in which she will receive the following payments at the end of the next five years: $3,000, $4,000, $5,000, $6,000

Kelly Green has a contract in which she will receive the following payments at the end of the next five years: $3,000, $4,000, $5,000, $6,000 and $7,000. She will then receive an annuity of $9,000 a year from the end of the sixth year through the end of the 15th year. The appropriate discount rate is 13%. If she is offered $40,000 to cancel the contract, should she do it?

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