On Joe Martin's graduation from college, Joe's uncle promised him a gift of $11,400 in cash or $740 every quarter for the next 5 yearsafter graduation. Assume money could be invested at 8% compounded quarterly. (Use Table 13.2.)a. Calculate the present value of options. (Do not round intermediate calculations. Round your answers to the nearest cent.)Present valueOption 1Option 2b. Which offer is better for Joe?O Option 2O Option 1 TABLE 13-2Present value of an annuity of $1Period2%3%4%5%6%7%8%9%10%11%12%13%10.98040.97090.96150.95240.94340.93460.92590.91740.90910.90090.89290.885021.94161.91351.88611.85941.83341.80801.78331.75911.73551.71251.69011.66812.88392.82862.77512.72322.67302.62432.57712.53132.48692.44372.40182.361243.80773.71713.62993.54593.46513.38723.31213.23973.16993.10243.03732.97454.71344.57974.45184.32954.21244.10023.99273.88973.79083.69593.60483.51725.60145.41725.24215.07574.91734.76654.62294.48594.35534.23054.11143.997576.47206.23036.00215.78645.58245.38935.20645.03304.86844.71224.56384.42268.7.32557.01976.73276.46326.20985.97 135.74665.53485.33495.14614.96764.79888.16227.78617.43537.10786.80176.51526.24695.99525.75905.53705.32825.1317108.98268.53028.11097.72177.36017.02366.71016.41776.14465.88925.65025.4262119.78689.25268.76058.30647.88697.49877.13906.80526.49516.20655.93775.68691210.57539.95409.38518.86328.38387.94277.53617.16076.81376.49246.19445.91761311.348310.63509.98569.39368.85278.35767.90387.48697.10346.74996.42356.12181412.106211.296110.56319.89869.29508.74558.24427.78627.36676.98196.62826.30251512.849211.937911.118410.37969.71229.10798.55958.06077.60617.19096.81096.46241613.577712.561111.652310.837810.10599.44668.85148.31267.82377.37926.97406.60391714.291813.166112.165711.274110.47739.76329.12168.54368.02167.54887.11966.72911814.992013.753512.659311.689610.827610.05919.37 198.75568.20147.70167.24976.83991915.678414.323813.133912.085311.158110.33569.60368.95018.36497.83937.36586.93802016.351414.877513.590312.462211.469910.59409.81819.12858.51367.96337.46947.02482519.523417.413115.622114.093912.783411.653610.67489.82269.07708.42177.84317.33003022.396419.600417.292015.372413.764812.409011.257810.27379.42698.69388.05527.49574027.355423.114819.792817.159115.046313.331711.924610.75749.77908.95118.24387.63445031.423625.729821.482218.255915.761913.800712.233510.96179.91489.04178.30457.67523.LO

The present value of the options are calculated by discounting the future cash flows from the…

On Joe Martin's graduation from college, Joe's uncle promised him a gift of $11,400 in cash or $740 every quarter for the next 5 years after graduation. Assume money could be invested at 8% compounded quarterly. (Use Table 13.2.) a. Calculate the present value of options. (Do not round intermediate calculations. Round your answers to the nearest cent.) Present value Option 1 Option 2 b. Which offer is better for Joe? O Option 2 O Option 1

On Joe Martin's graduation from college, Joe's uncle promised him a gift of $11,400 in cash or $740 every quarter for the next 5 years after graduation. Assume money could be invested at 8% compounded quarterly. (Use Table 13.2.) a. Calculate the present value of options. (Do not round intermediate calculations. Round your answers to the nearest cent.) Present value Option 1 Option 2 b. Which offer is better for Joe? O Option 2 O Option 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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