Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now; $2,200
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Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now; $2,200 a year for nine years; or $31,000 at the end of nine years. Assuming you could earn 10 percent annually, which alternative should you choose? If you could earn 11 percent annually, would you still choose the same alternative?
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a1 first alternative Present value of 7500 received now 7500 Present value of annuity of 2200 for ni...View the full answer
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Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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