Buster's Badminton Bazaar produces high performance Badminton racquets. The current price of a racquet is...
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Buster's Badminton Bazaar produces high performance Badminton racquets. The current price of a racquet is $240. Buster's expects that, for the indefinite future, the racquet price will rise only by the inflation rate, which is expected to be one percent per year. a. What will the nominal racquet price be in five years? b. What will the nominal racquet price be in fifty years? c. Suppose that Buster's expects to sell 3,000 racquets next year, and the same number each subsequent year for the next fifty years. If the nominal interest rate is 6%, what is the present value of Buster's expected sales revenue from the racquets
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