Which has a greater Net Present Value (NPV), a payment of $40,000 over 30 years beginning in 1950 or a payment of $1 million per year for 20 years beginning in 2040, using an inflation value of 4%? Explain.
To calculate the NPV we bring everything back to 1950.
So first we need to calculate present value of a payment of 40,000 over 30 years. We ...
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