Your grandfather would like to share some of his fortune with you. He offers to give...

 

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Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose): 1. $8,250 per year at the end of each of the next seven years 2. $50,250 (lump sum) now 3. $99,350 (lump sum) seven years from now (Click the icon to view Present Value of $1 table.) Read the requirements Requirement 1. Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest present value? (Round the factors to three decimal places, X.XXX. Round the present value to the nearest whole dollar.) Scenario 1: Scenario 2: Scenario 3: Present Value Scenario 1: Scenario 2: Scenario 3: (Click the icon to view Present Value of Ordinary Annuity of $1 table.). appears to be the best option. Based on a 6% interest rate, its present value is the Requirement 2. Would your preference change if you used a 12% discount rate? Compute the present value of each scenario using a 12% discount rate. (Round the factors to three decimal places, XXXX. Round the present value to the nearest whole dollar.) Present Value appears to be the best option. Based on a 12% interest rate, its present value is the Enter any number in the edit fields and then continue to the next question. ? Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose): 1. $8,250 per year at the end of each of the next seven years 2. $50,250 (lump sum) now 3. $99,350 (lump sum) seven years from now (Click the icon to view Present Value of $1 table.) Read the requirements Requirement 1. Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest present value? (Round the factors to three decimal places, X.XXX. Round the present value to the nearest whole dollar.) Scenario 1: Scenario 2: Scenario 3: Present Value Scenario 1: Scenario 2: Scenario 3: (Click the icon to view Present Value of Ordinary Annuity of $1 table.). appears to be the best option. Based on a 6% interest rate, its present value is the Requirement 2. Would your preference change if you used a 12% discount rate? Compute the present value of each scenario using a 12% discount rate. (Round the factors to three decimal places, XXXX. Round the present value to the nearest whole dollar.) Present Value appears to be the best option. Based on a 12% interest rate, its present value is the Enter any number in the edit fields and then continue to the next question. ?

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Requirement 1 Present Value at 6 Discount Rate Scenario 1 8250 per yea... View the full answer