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In Year 0, you leased some equipment for an annual rental of 2.2 million. The contract allows you to buy the equipment at any time
In Year 0, you leased some equipment for an annual rental of 2.2 million. The contract allows you to buy the equipment at any time by paying a lumpsum amount calculated to ensure that the discounted value of all the rentals and the lumpsum discounted back to Year 0 at 15.9% is equal to 10.2 million. Immediately after paying the first two years' rental (Year 1 and Year 2), what would be the lumpsum amount payable if you decide to buy the equipment
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