e) Assume that you just won a prize from UAE governm pandemic. Your prize can be token either in the form of AED 30,000 at the end of each of the next 25 years (that is, AED 750,000 over 25 years) or as a single amount of AED 400.000 paid immediately a f you expect to be able to eam 3% onnuolly on your investments over the next 25 years, ignoring taxes and other considerations, which altermative should you toke? Why? nart g change if you could earn 8% rother than 3% on your investments lormulos
e) Assume that you just won a prize from UAE governm pandemic. Your prize can be token either in the form of AED 30,000 at the end of each of the next 25 years (that is, AED 750,000 over 25 years) or as a single amount of AED 400.000 paid immediately a f you expect to be able to eam 3% onnuolly on your investments over the next 25 years, ignoring taxes and other considerations, which altermative should you toke? Why? nart g change if you could earn 8% rother than 3% on your investments lormulos
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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Hello please solve B
![ADJUST
A) Nassar ill receive SKKUU
book. What is the present value of her royalty income if the opportury co
B) Assume that you just won a prize from UAE government for your work in fighting COVID-19
pandemic. Your prize can be taken either in the form of AED 30,000 at the end of each of the next 25
years (that is, AED 750,000 over 25 years) or as a single amount of AED 400,000 paid immediately
a. if you expect to be able to earn 3% annually on your investments over the next 25 years, ignoring
taxes and other considerations, which alternative should you take? Why?
b. Would your decision in part a change if you could earn 8% rather than 3% on your investments
over the next 25 years? Why? You may use the following formulas:
FV
PV =
(1 + r)"
{"
Py. - ()1-
{a
(1 + r)"
1]
FV, = CF x
1
CF
PV, =
(1 + r)"
[(1 + r)"
X (1 + r)
FV, = CF x
MacBook Air
DII
DO
&
6 7
7 V
8
9 9
そ
こ
Retake
Use Photo
AUTO
Cancel
Revert](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F942b06a1-e1f1-4dbe-a5b9-420ebd6fee65%2F837d43a3-85a7-46f8-a281-c52848ae1256%2Fibayhld_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ADJUST
A) Nassar ill receive SKKUU
book. What is the present value of her royalty income if the opportury co
B) Assume that you just won a prize from UAE government for your work in fighting COVID-19
pandemic. Your prize can be taken either in the form of AED 30,000 at the end of each of the next 25
years (that is, AED 750,000 over 25 years) or as a single amount of AED 400,000 paid immediately
a. if you expect to be able to earn 3% annually on your investments over the next 25 years, ignoring
taxes and other considerations, which alternative should you take? Why?
b. Would your decision in part a change if you could earn 8% rather than 3% on your investments
over the next 25 years? Why? You may use the following formulas:
FV
PV =
(1 + r)"
{"
Py. - ()1-
{a
(1 + r)"
1]
FV, = CF x
1
CF
PV, =
(1 + r)"
[(1 + r)"
X (1 + r)
FV, = CF x
MacBook Air
DII
DO
&
6 7
7 V
8
9 9
そ
こ
Retake
Use Photo
AUTO
Cancel
Revert
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