### What is the present value of a payment

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 If the interest rate this year is 8.6% and the interest rate next year will be 10.6%, what is the future value of \$1 after 2 years? What is the present value of a payment of \$1 to be received in 2 years?

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ABC firm has a debt to equity ratio of 2.3 (that they wish to maintain) and new investments would cost \$35 million this year. The firm expects earnings of \$12 million this yea

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