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Question 5 [5 pts] Answer questions (a) and (b) below. Today is Dec. 31, 2050. You are considering a financial claim that promises to pay
Question 5 [5 pts]
Answer questions (a) and (b) below.
- Today is Dec. 31, 2050. You are considering a financial claim that promises to pay $100 in one year from today. It will make the same payment at the end of each year indefinitely. Assume that the discount rate is 10%. Determine the price of this financial claim.
Answer (show the steps/calculation toward your results):
- Suppose there is another type of financial claim with a slightly different payment scenario you are considering. It will pay $80 for next three years, starting from Dec. 31 2051 and then is expected to pay $100 from Dec. 31 2054 forever thereafter. The same discount rate applies. Find the price of this financial claim.
Answer (show the steps/calculation toward your results):
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Financing Large Projects Using Project Finance Techniques And Practices
Authors: Fouzul Khan, Robert Parra
1st Edition
9780131016347
