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Homework answers / question archive / AstraZeneca is developing a vaccine to combat COVID19
Semi annual rate equivalent to growth rate of 13.42% compounded annually =
(1+13.42%)^(1/2)-1= 6.498826%
Semi annual rate equivalent to rate of return of 16.48% compounded annually =
(1+16.48%)^(1/2)-1= 7.925901%
Cash inflows as stated constitute a growing annuity due of $525,000, semi annual, for 5 years, starting 6 years from now.
Maximum amount that can be invested now is the PV of this annuity, further discounted for 6 years = $ 1,981,320.03
Calculation as follows:
PLEASE SEE THE ATTACHED FILE.