Question: Don Draper has signed a contract that will pay him $55,000 at the end of each year for the next 9 years, plus an additional

Don Draper has signed a contract that will pay him $55,000 at the end of each year for the next 9 years, plus an additional $140,000 at the end of year 9.

If 12 percent is the appropriate discount rate, what is the present value of this contract?

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Part 1

The present value of the contract is

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