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Assume you are told that by investing $100,000 now, you will receive $10,000 per year starting in year 5 and continuing forever. If you accept
Assume you are told that by investing $100,000 now, you will receive $10,000 per year starting in year 5 and continuing forever. If you accept the of- fer, the rate of return on the investment is:
a. 4% per year
b. between 6% and 7% per year
c. between 7% and 10% per year
d. over 12% per year
Please explain your answer
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