1. You just signed a consulting contract that will provide annual consulting fees to you for the coming 5 years. The first payment would be made at the end of this year at $10,000. It is given that the appropriate discount rate is 5%.

a) If the payment is constant at $10,000, and would be paid at the end of each year, what is the present value of the consulting contract?

b) If the payment amount would be increased by 5% annually, and would be paid at the end of each year, what is the present value of the consulting contract?