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You can choose any one of the following prizes. If your discount rate is 10% (annual compounding), which is the most valuable prize? A. A

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You can choose any one of the following prizes. If your discount rate is 10% (annual compounding), which is the most valuable prize? A. A lump sum payment of $20,000 today B. A lump sum payment of $50,000 at the end of 10 years. C. A perpetual stream of annual payments starting at $1,000 in one year and increasing at 5% per year thereafter (paid at the end of each year forever). D. A perpetual stream of annual payments of $2,000 starting in one year.($2,000 at the end of each year forever.) E. Five annual payments of $5,600: the first payment occurs one year from today. ($5,600 at end of each year for 5 years.)

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