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Jerry James is an athlete offered a contracts by two different teams. The payments (in millions) he receives under the two contracts are listed below.
Jerry James is an athlete offered a contracts by two different teams. The payments (in millions) he receives under the two contracts are listed below.
Team 1-NJ Team 2-NY Year Cash Flow Cash Flow 0 8.0 2.5 1 4.0 4.0 2 4.0 4.0 3 4.0 8.0 4 4.0 8.0
James is committed to accepting the contract that provides him with the highest net present value (NPV). At what discount rate would he be indifferent between the two contracts?
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