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Each year, Muriel's investment property generates income depending on the state of the economy. There is a 54% chance of a boom year, in which
Each year, Muriel's investment property generates income depending on the state of the economy. There is a 54% chance of a boom year, in which case she receives $16,140. In non-boom years, she receives $4,867. Her property will continue generating income forever, and the appropriate discount rate is 15.8%. What would be a fair price for Muriel's property?
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