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A company has a 15-year contract which guarantees $375,000 each year in the first 5 years, $550,000 each year in the next 5 years, and
A company has a 15-year contract which guarantees $375,000 each year in the first 5 years, $550,000 each year in the next 5 years, and $750,000 each year in the final 5 years. The company is presented with an offer to buy-out the contract. What is the minimum value to be considered for this contract offer? Assume a market interest rate of 9%.
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