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Unformatted text preview: P4-1. A4-1. A best-selling author decides to cash in on her latest novel by selling the rights to the book’s
royalties for the next four years to an investor. Royalty payments arrive once per year, starting
one year from now. In the first year the author expects $400,000 in royalties, followed by
$300,000, $100,000, and $10,000 in the three subsequent years. If the investor purchasing the
rights to royalties requires a return of seven percent per year, what should the investor pay? ...
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This note was uploaded on 08/22/2011 for the course ACCOUNTING 201 taught by Professor Stevejoseph during the Winter '11 term at Aarhus Universitet.
- Winter '11