Your father offers you a choice of $105,000 in 12 years or $47,000 today. If money is discounted at 8 percent, which option should you choose? If money is still discounted at 8 percent, but your choice is between $105,000 in 9 years or $47,000 today, which should you choose?

Your father offers you a choice of $105,000 in 12 years or $47,000 today. If money is discounted at 8 percent, which option should you choose? If money is still discounted at 8 percent, but your choice is between $105,000 in 9 years or $47,000 today, which should you choose?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 19P

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Your father offers you a choice of $105,000 in 12 years or $47,000 today.

If money is discounted at 8 percent, which option should you choose?
If money is still discounted at 8 percent, but your choice is between $105,000 in 9 years or $47,000 today, which should you choose?

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