What is the value of this patenting contract

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Reference no: EM131234179

1. An eternal patent contract states that the patentee will pay the patentor a fee of $1.5 million next year.

The contract terms state a fee growth with the inflation rate, which runs at 2% per annum. The appropriate cost of capital is 14%. What is the value of this patenting contract?

2. How would the patent contract value change if the first payment did not occur next year, but tonight?

Reference no: EM131234179

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