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Ali thinks that an ordinary annuity with a cash inflow of $10,000 for each of 6 years is more attractive than an annuity due with
Ali thinks that an ordinary annuity with a cash inflow of $10,000 for each of 6 years is more attractive than an annuity due with a cash inflow of $9,000 over the same period. Assume that Ali can earn 15% pa on his investments. a. Based on the future value of each annuity stream, is Ali right? b. Will the answer to (b) be different if Ali is able to earn only 5% pa on his investments? Support your answer with calculations
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