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You have just won an elephant in a lottery. You do not like elephants however you will be paid $2,500 a year for the first
You have just won an elephant in a lottery. You do not like elephants however you will be paid $2,500 a year for the first 10 years and $4,500 a year for the next 20 years, plus expenses. Assume all payments are at the end of the year. Your sister has just offered you $30,000 to take over the care of the elephant. If the appropriate interest rate is 8%, which option is better from a purely financial point of view?
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