Order the answer to: In the chapter, you learned that when future income from

Custom Essays business-economics Order the answer to: In the chapter, you learned that when future income from

business-economics

Order the answer to: In the chapter, you learned that when future income from

Question In the chapter, you learned that when future income from an asset is uncertain, the asset??s value will be less than the present value of its future payments, because present value is calculated assuming these payments are certain. A different way to think about uncertainty is to calculate a modified present value, which uses a higher discount rate, equal to the safe lending interest rate plus a risk premium. In Problem 5, answer a through d again, assuming that (a) each interest rate provided in the problem is for riskless lending; and (b) the risk premium for developing new drugs is 20percent.
Subject business-economics
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