Question: (Present value of a complex stream) Don Draper has signed a contract that will pay him $40,000 at the beginning of each year for the

(Present value of a complex stream) Don Draper has signed a contract that will pay him $40,000 at the beginning of each year for the next 9 years, plus an additional $110,000 at the end of year 9. If 10 percent is the appropriate discount rate, what is the present value of this contract?

A. What is the present value of $40,000 at the beginning of each year for the next 9 years if the discount rate is 10 percent?

B. What is the present value of $110,000 at the end of year 9 if the discount rate is 10 percent?

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