Answer:
a. Best deal is 30 end-of-year payments of $5.6 million
b. Best deal is 10 end-of-year payments of $9.5 million
c. Best deal is lump sum today of $62 million
Explanation:
Please see attachment for workings.
d. As the interest rate increases, the duration of value shortens. That is as the interest rate increases, the best choose based on their payment duration reduces
the answer to this question is 4.70%
A countertrade is a form of trading arrangement in which part or all of the payment for purchased goods or services is in the form of other goods and services.
Barter transactions can be among non-public events, among a non-public party and a sovereign state,' or between sovereign international locations." The countertrade transaction includes a parallel set of duties in which the parties ever undertake to sell items or era to the other in separate however related transactions.
The not unusual function of counter-change preparations is that export income to a particular market is made conditional upon undertakings to simply accept imports from that marketplace. for instance, an exporter can also promote machinery to USA X in a situation where he accepts agricultural merchandise from X for a fee.
A countertrade approach targets temporary corrections in a trending security fee motion to profit. The method involves buying/promoting security that has skilled an impulsive bearish/bullish flow within the hopes that a corrective move higher/decrease will permit them to sell/buy it back at that better/lower fee.
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