The state government has just fined your company for breaches of the fire regulation act. It...
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The state government has just fined your company for breaches of the fire regulation act. It has offered the following payment options to the company. If the interest rate appropriate for the company is 10% p.a. and all cash flows occur at the end of the year, which payment option should the company choose? $550,000 today. $150.000 per year for the next five years. Your answer is incorrect Read the question carefully, noting the cash flows that you need to value to the present before comparing them to each other. OSP00.000 at the end of year five er O $400,000 at the end of year one and $200,000 at the end of year two, The state government has just fined your company for breaches of the fire regulation act. It has offered the following payment options to the company. If the interest rate appropriate for the company is 10% p.a. and all cash flows occur at the end of the year, which payment option should the company choose? $550,000 today. $150.000 per year for the next five years. Your answer is incorrect Read the question carefully, noting the cash flows that you need to value to the present before comparing them to each other. OSP00.000 at the end of year five er O $400,000 at the end of year one and $200,000 at the end of year two,
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Answer Answer D is correct Because the company cash fl... View the full answer
Related Book For
Financial management theory and practice
ISBN: 978-1439078099
13th edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date:
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