Question: QUESTION 17 Your client has asked you for advice concerning the following annuity for a client. Payments of $15,000 per year for 20 years beginning

QUESTION 17

  1. Your client has asked you for advice concerning the following annuity for a client. Payments of $15,000 per year for 20 years beginning at the end of next year. (payments occur at the end of each year, first payment one year after you buy the annuity contract).

    The price the insurance company is charging your client for this annuity $120,000. You must make the payment today (time 0). The client requires an internal rate of return on the investment of 12%. Your client should buy this annuity.

    Use the Excel IRR function to solve this problem.

    True

    False

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