2. What is the present value of a firm with a five-year life span that earns the...

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2. What is the present value of a firm with a five-year life span that earns the following stream of expected profit? (Treat all profits as being received at year-end.) Use a risk-adjusted discount rate of 12 percent.

Year Expected profit 1 $10,000 2 20,000 3 50,000 4 75,000 5 50,000

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