Accumulated trailing commissions from loans

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Question

Lee Cutting, a mortgage broker, has accumulated trailing commissions from loans she issued which will generate positive cash flows of $200,000 at the end of each of the next 10 years. She has been approached by a competitor who wishes to purchase her debt book.

Lee is concerned that given currently high inflation she may need to increase her annual required rate of return to 10%. Re-calculate the present value of the cash flows using 10% as the required return.

Reference no: EM133976749

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