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John is a lucky guy. He just learned that at age 35 he will be the beneficiary of a $1,000,000 payment from his grandfather's estate.
John is a lucky guy. He just learned that at age 35 he will be the beneficiary of a $1,000,000 payment from his grandfather's estate. John, who is currently 27 and 8 years away from his big payday, has just completed a business correspondence course where he has learned about the time value of money, and decides to put his new knowledge to work. Assuming he performed his calculations correctly, what should be the present value of John's future payment if John's cost of capital is 4%?
a) $533
b) $789,409
c) $67,760
d) $676,839
e) $730,690
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