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Posted on Jul 25, 2024

A lump - sum payment of $ 1 , 0 4 0 , 0 0 0 right now, in which case 4 5 % will

A lump

-

sum payment of $

1, 040, 000

right now, in which case

45 %

will be deducted for taxes. We do not know the level of

Archie's investment skills and therefore are unsure what rate of return he will earn on the lump

-

sum. What is the present

value?

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