Question: explain your answer to the following question 14. Explain your answer to the following question: You can receive one of the following two sets of

explain your answer to the following question 14. Explain your answer

explain your answer to the following question

14. Explain your answer to the following question: You can receive one of the following two sets of cash flows. Under Option A, you will receive 10 annual payments of $1,000, with the first payment to occur 4 years from now. Under Option B, you will receive X at the end of each year, forever, with the first payment to occur 1 year from now. The annual effective rate of interest is 8%. Which of the following equations should be solved to find the value of X such that you are indifferent between these two options? (A) 80am 4 =X (B) 80a ) =X (C) 80av) = X (D) 80a (0.08) = X (E) 80av = X

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