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What is the present value of the following series of cash payments: $1,600 per year for four consecutive years starting one year from today, followed
What is the present value of the following series of cash payments: $1,600 per year for four consecutive years starting one year from today, followed by annual cash payments that increase by 5% per year in perpetuity (i.e. cash payment in year 5 is $1,600*1.05, cash payment in year 6 is $1,600*1.052, etc.)? Assume the appropriate discount rate is 8%/year.
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