As winner of a breakfast cereal competition, you can choose one of the following prizes: a. $100,000

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As winner of a breakfast cereal competition, you can choose one of the following prizes:

a. $100,000 now.

b. $180,000 at the end of five years.

c. $11,400 a year forever.

d. $19,000 for each of 10 years.

e. $6,500 next year and increasing thereafter by 5 percent a year forever. If the interest rate is 12 percent, which is the most valuable prize

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Principles of Corporate Finance

ISBN: 978-0072869460

7th edition

Authors: Richard A. Brealey, Stewart C. Myers

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Question Posted: Jun 08, 2011 03:53 AM

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As winner of a breakfast cereal competition, you can choose one of the following prizes: a. $100,000

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a PV 100000 b PV 1800001125 102137 c PV 114...View the full answer

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