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1a) What is the present value PV of the following streams of cash flows (CFs), if...

1a) What is the present value PV of the following streams of cash flows (CFs), if the discount rate is 7% of a stream of 10 CFs. The first CF starts next year and is equal to $2,000. Then the next 5 CFs grow at 15% (over the prior year). The next 2 CFs are $0; the last 2 CFs are equal to $21,000.

1b) You will need $2,000,000 when you retire in 30 years from today. You are planning to make deposits in Citigroup Inc. (C) at the end of each year (first deposit in 1 year from today).

How much do you need to deposit every year ?

Note: The answer depends on the discount rate that reflects the risk of your cash flows. Assume that the discount rate is 6%.

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