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5. The heirs to a family fortune have chosen to donate some specified amount to a local non-profit health system. Through their financial advisors, they

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5. The heirs to a family fortune have chosen to donate some specified amount to a local non-profit health system. Through their financial advisors, they have offered the provider a choice between the payment of $60,000 per year into perpetuity starting today or a one-time lump sum payment of $700,000 today. Which of the two options is preferable from a present value standpoint if the appropriate discount rate is 5%? Which of the two options is preferable from a present value standpoint if the appropriate discount rate is 13%

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