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Thisis year Jacob Verytall signs a "Fifty Million Dollar" contract with the Mission City Muckrakers, a new basketball team. If he takes the job, he will pay $1000 dollars in moving costs immediately. Then he will be paid $10 million per year over the next 5 years beginning next year. The interest rate is 10%. In terms of this year's dollars, how much is this "Fifty Million Dollar" contract worth? If the interest rate falls, what will happen to the present value of this income stream?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9500082

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