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You are facing two investment opportun flows. The second one is annuity payments. Assume a 4.8% discount rate (your opportunity cost for money) and
You are facing two investment opportun flows. The second one is annuity payments. Assume a 4.8% discount rate (your opportunity cost for money) and payments are in the end-of-period. (Part a) How much you are willing to pay for this uneven stream of cash flows? Round to the nearest whole dollar. Year Cash Flow 1 $3,800 2 $3,300 3 $4,500 4 I $5,800 (Part b) If the investment will provide you with 54400 end of period payments for the next four years. How much you are willing to pay for the annuity? (Part. c) If there is another annuity that will break even with the uneven stream of cash flows (in part a) with 5 annual payments, how much you should receive each year from the annuity investment? AMZN
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