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You have invented a money machine. If you start building this machine now (t=0), it will take you four years to build it. When being
You have invented a money machine. If you start building this machine now (t=0), it will take you four years to build it. When being built, the machine does not generate any cash flow for you. However, once built, the machine will generate $100 at the end of every year without any cost. The machine will last forever and will require no maintenance costs. Suppose the annual interest rate is 10%. How much is the machine worth today?
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