Question

# 4. The appropriate  annual  discount rate for each part is given...

4. The appropriate annual discount rate for each part is given to you as 14% (0.14). Please answer all parts below.

Part A

What is the appropriate price to pay for a security that makes one payment of 21,000 in 1 year?

Part B

What is the appropriate price to pay for a security that makes one payment of 21,000 in 4 years?

Part C

What is the appropriate price to pay for a security that makes two payments, one payment of 10,500 in 19 months and one payment of 10,500 in 52 months?

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