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Bridget Jones has a contract in which she will receive the following payments for the next five years: $10,000,$11,000,$12,000, $13,000,$14,000. She will then receive an
Bridget Jones has a contract in which she will receive the following payments for the next five years: $10,000,$11,000,$12,000, $13,000,$14,000. She will then receive an annuity of $17,500 a year from the end of the sixth year through the end of the fifteenth year. The appropriate discount rate is 12 percent. a. What is the present value of all future payments? (Use a Financial calculator to arrive at the answer. Round the final answer to the nearest dollar amount.) Present value b. If she is offered a buyout of the contract for $39,000, should she do it? Yes No
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