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(1) Percy is nearing retirement, and his firm is offering him a choice between an annualpension, or a single lump sum payment. They tell him
(1) Percy is nearing retirement, and his firm is offering him a choice between an annualpension, or a single lump sum payment. They tell him he can either take $100k cash today, or a $5k per year payment for 40 years that will increase by 2% each year. Which should he choose? Assume a discount rate of 8%.
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