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You are going to buy a car from your uncle for which he paid $70,000 5 years ago. You will take delivery of the car
You are going to buy a car from your uncle for which he paid $70,000 5 years ago. You will take delivery of the car two years from now. He needs a payment of $1,000 today plus $5,000 one year from now. Upon delivery two years from now, you pay him a final payment of $26,722.50. What is the value of your initial investment? Assume a discount rate of 5%.
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