What happens if your payments increase

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Question - Congratulations! You just won $150,000 in the state lottery. You can collect $15,000 today and receive the remainder in annual payments of the same amount. Use the current U.S. Treasury 10-Year Note yield as your discount rate to calculate the PV. What happens if your payments increase by 2% per year? Why is the U.S. 10-Year Note yield an appropriate discount rate? Or is it? Please discuss.

Reference no: EM132823744

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