Which option is better: receive $120,000 now or $25,000, $45,000, $35,000, $15,000, and $50,000, respectively, over the
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1. Assuming an 8% interest rate, which investment opportunity would you choose?
2. If you could earn 10%, would your choice change?
3. Assuming a 10% interest rate, what would the cash flow in year 5 have to be in order for you to be indifferent to the two plans?
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Req 1 Amount of Cash Flow 8 Factor from Table Present Value of Cash Flow 25000 x 926 23150 45000 x 8...View the full answer
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Related Book For
Financial Accounting
ISBN: 978-0134127620
11th edition
Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz
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