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Posted by: Annie kavitha
Price Quoted by Student: $2.5
Posted On: 2011-04-01 05:05:37
 
Question
Alternative present values - - Your rich godfather has offered you a choice of one of the three following alternatives: $10,000 now; $2,000 a year for eight years; or $24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?

Solutions
Option 1: Present value of cash flow = $10,000 O
Price $2.5
Attachment 1: Your rich godfather has offered you a choice of (2).doc
Solution Posted By: Annie kavitha    Posted on: 01-04-2011