Your mother is planning to retire this year. Her firm has offered her a lump-sum retirement payment

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Your mother is planning to retire this year. Her firm has offered her a lump-sum retirement payment of $50,000 or a $6,000 lifetime annuity—whichever she chooses. Your mother is in reasonably good health and expects to live for at least 15 more years. Which option should she choose, assuming that an 8 percent interest rate is appropriate to evaluate the annuity?

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Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

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