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They present you with three contracts, giving you a choice of the three:

(a) 6,400,000 per year for the next 5 years, payable at the end of each year.

(b) 6,000,000 per year for the next 5 years, payable at the beginning of each year.

You decide to calculate the present value of each contract at effective rates 4%, 5% and 6%, and to then decide. Make those calculations. What do you conclude?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91529198

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