Background: A company has an offer to sell its office building for a lump sum...
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Background: A company has an offer to sell its office building for a lump sum of $1,500,000 in cash. The owners prefer to have a steady stream of payments to assist them in their retirement planning. REQUIRED: A) Given a 7-year payout and a discount rate of 9%, what annual payment will cause this option to be equal in value to the lump sum payment? B) If the annual payment from part "A" were paid in an appropriate quarterly amount, would this change the value of the option? Why or why not
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