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The Doug and Bob Corporation is selling a perpetual annuity contract that pays $30,000 per year. The contract currently states the annuity will start payments
The Doug and Bob Corporation is selling a perpetual annuity contract that pays $30,000 per year. The contract currently states the annuity will start payments in year 10 . If the going rate of return on this investment is 10%, what should we be willing to pay for the perpetual annuity today (approximately)? a) $139,952 b) $105,148 c) $115,663 d) $127,229 ** e) $300,000
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