Question: Bridget Jones has a contract in which she will receive the following payments for the next five years: $14,000, $15,000, $16,000, $17,000, $18,000. She will
Bridget Jones has a contract in which she will receive the following payments for the next five years: $14,000, $15,000, $16,000, $17,000, $18,000. She will then receive an annuity of $21,500 a year from the end of the sixth year through the end of the fifteenth year. The appropriate discount rate is 18 percent. a. What is the present value of all future payments? Use Appendix B and Appendix D. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to the nearest dollar amount.) Present value $ b. If she is offered a buyout of the contract for $43,000, should she do it? multiple choice Yes No
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