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Question: Bridget Jones has a contract in which she will receive the following payments for the next five years: $10,000, $11,000, $12,000, $13,000, and $14,000. She will then receive an annuity of $16,000 a year from the end of the 6th through the end of the 15th year. The appropriate discount rate is 10 percent.

a. What is the present value of all future payments? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Present Value:

b. If she is offered $108,000 to cancel the contract, should she do it?

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Category:- Basic Finance
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