Question: • What is the most that you would be willing to pay for a payment stream of $100 per year for the first fifteen years and $200 per year for the next five years (i.e. years16-20), given a 12 percent discount rate?
• Based on your answer to the question above, will you be willing to pay more or less for a payment stream of $125 per year for 20 years, at 12 percent? Why or why not?