423.10
10.Let’s say you’re Darth Vader and you’ve just occupied Cloud City. Lando Calrissian is offering you two tributes: Cloud City can afford to pay the Empire $10 million next year and increase the amount by 5% each year forever. Otherwise, you can accept no tribute for 9 years and then, starting 10 years from today, Cloud City will be able to afford to pay the Empire a flat tribute of $20 million every year forever. If your discount rate is 15% per year, which tribute should you take? (10)