the present value of the annuity is

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
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Simes​ Innovations, Inc., is negotiating to purchase exclusive rights to manufacture and market a​ solar-powered toy car. The​ car's inventor has offered Simes the choice of either a​ one-time payment of ​$1,600,000
today or a series of 6 ​year-end payments of ​$365,000.
__________________________________________________________________________
a. If Simes has a cost of capital of 12​%,the present value of the annuity is $________
 
b. The yearly payment that would make the two offers identical in value at a cost of capital of 12​% is ​$ ___________​(Round to the nearest​ dollar.)
 
c.If the yearly payments were made at the beginning of each​ year, the present value of the annuity is $_____________.
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