Question

You have the following choices Choice number 1: $5 million today, $5 million per year for...

You have the following choices

Choice number 1: $5 million today, $5 million per year for 19 years (years 1--19), $10 million per year for nineteen years (years 20--38), and $710 million in year 39.

Choice number 2: $250 million today.

What would u choose if r= 4.5%

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. You have a choice of $1 million in 50 years or $1,600 today. If your...
2. You have a choice of $1 million in 50 years or $1,600 today. If your interest rate is 14%, which would you choose? (show your work to receive credit). 3. You are looking at 2 investments. One will pay you $550 a year for the next 15 years. The other one will pay you $24,000 in 20 years. If your rate of return is 9%, which is the best investment for you? (show your work to receive credit).
You have four choices. A) To build a “stainless-steel” bridge that will cost you $5 million...
You have four choices. A) To build a “stainless-steel” bridge that will cost you $5 million and last 120 years; or, B) build a regular steel bridge that needs to be replaced after 60 years and today would cost you $4 million and then (in 2020-$) another $4 million in 60 years, or C) build a wooden bridge that costs $3 million and need to be replaced every 20 years (i.e., replaced 5 times to last 120 years) (every time...
1. Suppose you win the lottery and you have the choice of a selecting the following...
1. Suppose you win the lottery and you have the choice of a selecting the following options: a/ $400 million in 10 equal payments starting today or; b/ $300 million today or; c/ $25 million per year starting at the end of year 5 forever If the interest rate is 6%, which option is the best option? (the option that will have the highest present value).
You have $5,000 to invest. You have two choices of how to invest. Choice “A” would...
You have $5,000 to invest. You have two choices of how to invest. Choice “A” would have you invest at 5% per year for two years. Choice “B” would have you invest at 4.75% for the first year and then re-invest the proceeds for another year. What rate of return would you need to earn on the second year of Choice “B” to make you expect to earn the same return as for Choice “A”?
You won the lottery and have a number of choices as to how to take the...
You won the lottery and have a number of choices as to how to take the money. Which choice yields a greater present value? (Use a 10% discount/hurdle rate) Present Value of an Ordinary Period Present Value of $1 at 10% Annuity of $1 at 10% 1 .909 .909 2 .826 1.736 3 .751 2.487 4 .683 3.170 5 .621 3.791 Group of answer choices $65,000 (lump sum) now $100,000 (lump sum) 5 years from now $10,000 a year at...
You have $50,000 in an account today, and can save $6,000 per year for 30 years....
You have $50,000 in an account today, and can save $6,000 per year for 30 years. What compounded rate of return would you need in order to have exactly $1,000,000 at the end of 30 years? Group of answer choices 9.80% 5.02% 7.24% 10.07%
You are offered the choice between the following options: a) Get $3,200 each year for 10...
You are offered the choice between the following options: a) Get $3,200 each year for 10 years. First payment after the first year. b) Get $7,000 today, and thereafter $3,000 each year for 5 years. First payment after the first year. c) Get $4,000 each year for 10 years. First payment after 5 years. The annual interest rate is 8%. Calculate the present values of those three options. Which one would you choose?
You just won a $1 million lottery today, and the rule of the lottery is to...
You just won a $1 million lottery today, and the rule of the lottery is to pay you $40,000 per year for the next 10 years, followed by $60,000 per year for the following 10 years. The first payment starts one year from now. You estimated the appropriate interest rate is 10% pa, what is the winnings worth today?
You are offered the choice between the following options: a) Get $3,200 each year for 10...
You are offered the choice between the following options: a) Get $3,200 each year for 10 years. First payment after the first year. b) Get $7,000 today, and thereafter $3,000 each year for 5 years. First payment after the first year. c) Get $4,000 each year for 10 years. First payment after 5 years. The annual interest rate is 8%. Calculate the present values of those three options. Which one would you choose and why? Show your work
You will receive the following cash payments as a retirement settlement: Year 0 1 2 3...
You will receive the following cash payments as a retirement settlement: Year 0 1 2 3 4 Amount $10,000 $20,000 $50,000 $50,000 $75,000 In place of the above you are offered a check today for $182,000. Assuming an interest rate of 4%, which would you choose? If an interest rate of 5% was used would this change your selection? Explain. You are offered a choice as follows: $10,000 per year for 10 years or an amount today of $69,000. Assuming...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT