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Suppose that you are going to receive two payments of$500, the first at the end of year 3, and the other at the end ofyear 6.First, draw the time line and mark the time (years) andpayments on the timeline.How much are you willing to pay for those cash flows (CFs)today if the current discount rate is 5%?What if the discount rate is 6% instead?How much would you be willing to pay in at the end of year 1 ifthe discount rate is 5%?How much would you be willing to pay in at the end of year 2using the same 5% discount rate?show both formula and with financial calculator
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