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You are considering two insurance settlement offers. The first offer includes annual payments of $36,000, $42,000, and $50,000 over the next three years, respectively, with
You are considering two insurance settlement offers. The first offer includes annual payments of $36,000, $42,000, and $50,000 over the next three years, respectively, with the first payment being made one year from today. The other offer is the payment of one lump sum amount today. The relevant discount rate is 7 percent. What is the minimum amount you should accept today if you are to select the lump sum offer?
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