8. Your father has promised you a large sum of money. He has offered you the following THREE choices: (i) Accept $100,000 today or, (ii) Accept $110,000 at the end of year 2 or, (iii) Accept $38,000 at the end of every year for the next 3 years. Assume the interest rate is 10% p.a. Which option would you select? Select one: a. The $38,000 at the end of every year for 3 years b. No difference between the three options c. $110,000 at the end of next year d. $100,000 now
8. Your father has promised you a large sum of money. He has offered you the following THREE choices: (i) Accept $100,000 today or, (ii) Accept $110,000 at the end of year 2 or, (iii) Accept $38,000 at the end of every year for the next 3 years. Assume the interest rate is 10% p.a. Which option would you select? Select one: a. The $38,000 at the end of every year for 3 years b. No difference between the three options c. $110,000 at the end of next year d. $100,000 now
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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8. Your father has promised you a large sum of money. He has offered you the following THREE choices:
(i) Accept $100,000 today or,
(ii) Accept $110,000 at the end of year 2 or,
(iii) Accept $38,000 at the end of every year for the next 3 years.
Assume the interest rate is 10% p.a.
Which option would you select?
Select one:
a.
The $38,000 at the end of every year for 3 years
b.
No difference between the three options
c.
$110,000 at the end of next year
d.
$100,000 now
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