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Assume that an appropriate discount rate for A - Rod to apply to the contract payments is 7 % per year. a . Calculate the
Assume that an appropriate discount rate for ARod to apply to the contract payments is per year.
a Calculate the true promised payments under this contract, including the deferred payments with interest.
b Draw a timeline of all of the payments.
c Calculate the present value of the contract.
d Compare the present value of the contract to the quoted value of $ million. What explains the difference?
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