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
Related questions
Question
Transcribed Image Text:IM
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DECISION TIME – LUMP SUM OR PAYMENTS
TAT
Would you rather take a lump sum of $372 million or 30 annual payments of $25
million if the current interest rate is 6%?
• Use the present value equation to calculate the present value of the $750 million in 30 annual
installments, given the interest rate of 6% to answer this question.
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Transcribed Image Text:IM
IN
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▪ Now that you made your decision, what
will you do with your money?
no.
-Explain in detail your first three
money moves you would conduct with
your new winnings.
· For example - Would you spend it? Save it?
What are your opportunity costs of your
purchases? VWhere would you save it
stocks/bonds/mutual funds/real estate?
Why? Would you give any money to
charities, how about to family and
friends?)
- TNLL NOISIOHO
YOUR NEW WEALHTH
· Make sure to examine the risk and return
relationship
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