Assume business can receive guaranteed annual payment

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Assume a business can receive a guaranteed annual payment of $1M forever. If the appropriate discount rate 12.0%, how much should the business be willing to pay today for these future payments (hint: is this an annuity, annuity due, or perpetuity)?

A. $8.3M

B. $24.0M

C. $25.0M

D. $6.3M

Reference no: EM131357455

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