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What is the present value today of the total commission

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Question - You work for a large consulting firm. For each client you serve, you will receive $3000 per year in arrears for the first 5 years; after that, the annual commission will be reduced by 15.0% each year relative to the year before for as long as the client stays with the contract. The discount rate is 8.0%. Assuming the client stays in the contract forever and both the client and you live forever.

A) What is the present value today of the first 5 payments?

B) What is the present value today of all the payments after 5 years?

C) What is the present value today of the total commission?

Reference no: EM133170976

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