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Show work for each individual problem with the formulas( no rate was provided ) ! Lester's just signed a contract that will provide the firm
Show work for each individual problem with the formulas( no rate was provided ) !
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 year. Finally, $8,000 annual payment, delivered by the contract, is believed to be permanent. 1) What is the present value of the perpetuity? 2) What is the present value of the annuity? 3) What is the present value of the first three years cash inflows? 4) What is the total present value delivered by the contract? 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 year. Finally, $8,000 annual payment, delivered by the contract, is believed to be permanent. 1) What is the present value of the perpetuity? 2) What is the present value of the annuity? 3) What is the present value of the first three years cash inflows? 4) What is the total present value delivered by the contractStep by Step Solution
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