Question: Cindy Barnes has just signed a contract that calls for a payment of $1.2 million today, $1.5 million one year from now, $1.5 million two

Cindy Barnes has just signed a contract that calls for a payment of $1.2 million today, $1.5 million one year from now, $1.5 million two years from now, and $1.8 million three years from today. What is the present value of the contract if Cindy uses a discount rate of 10%?

Select one:

a. $4.98 million

b. $5.12 million

c. $5.07 million

d. $5.03 million

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