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There are two investments. One would generate annual cash flows of $10,000 perpetually starting from the end of year 10. And the other would generate
There are two investments. One would generate annual cash flows of $10,000 perpetually starting from the end of year 10. And the other would generate annual cash flows of $25,000 for 5 years starting from the end of year 11. Assume you expect to earn an annual interest rate of 10%, which investment would be preferable?
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