Question: Don Draper has signed a contract that will pay him $60,000 at the beginning of each year for the next 5 years, plus an additional

Don Draper has signed a contract that will pay him $60,000 at the beginning of each year for the next 5 years, plus an additional $120,000 at the end of year 5 . If 7 percent is the appropriate discount rate, what is the present value of this contract?

a. What is the present value of $60,000 at the beginning of each year for the next 5 years if the discount rate is 7 percent?

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