Q 3.10. An eternal patent contract states that the patentee will pay the patentor a fee of

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Q 3.10. An eternal patent contract states that the patentee will pay the patentor a fee of $1.5 million next year. The contract terms state a fee growth with the inflation rate, which runs at 2% per annum. The appropriate cost of capital is 14%. What is the value of this patenting contract?

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