(Present value of a complex stream) Don Draper has signed a contract that will pay him $55,000 at the end of each year for the next 10 years, plus an additional $120,000 at the end of year 10. If 8 percent is the appropriate discount rate, what is the present value of this contract?
(Present value of a complex stream) Don Draper has signed a contract that will pay him $55,000 at the end of each year for the next 10 years, plus an additional $120,000 at the end of year 10. If 8 percent is the appropriate discount rate, what is the present value of this contract?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Part 1
(Present value of a complex stream) Don Draper has signed a contract that will pay him
$55,000
at the end of each year for the next
10
years, plus an additional
$120,000
at the end of year
10.
If
8
percent is the appropriate discount rate, what is the present value of this contract?Question content area bottom
Part 1
The present value of the contract is
$enter your response here.
(Round to the nearest cent.)Expert Solution
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