Question
Lester's just signed a contract that will provide the firm with annual cash inflows of $28,000, $35,000, and $42,000 over the next three years. Then
Lester's just signed a contract that will provide the firm with annual cash inflows of $28,000, $35,000, and $42,000 over the next three years. Then the firm will receive a $15,000 annuity for five years. Finally, an $8,000 annual payment, delivered by the contract, is believed to be permanent. The discount rate is 10%.
- What is the present value of the perpetuity?
- What is the present value of the annuity?
- What is the present value of the first three years cash inflows?
- What is the total present value delivered by the contract?
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Local Public Finance
Authors: René Geissler, Gerhard Hammerschmid, Christian Raffer
1st Edition
3030674681, 978-3030674687
