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1. using the information above calculate the discount rate of 6% determine the present value of each of the proposals AND recommend which offer is
1. using the information above calculate the discount rate of 6% determine the present value of each of the proposals AND recommend which offer is the best and why? show all calculations and explain? PLEASE HELP ME OUT WITH THIS QUESTION
The three proposals are listed below. An actuarial table indicated that Allison, age 37 at the time of the accident, had an anticipated life expectancy of 40 more years. Proposal 1 Pay the family of Allison Boone $300.000 a year for the next 20 years, and $500.000 a year for the remaining 20 years. Proposal 2 Pay the family a lump-sum payment of $5 million today. Proposal 3 Pay the family of Allison Boone a relatively small amount of $50.000 a year for the next 40 years, but also guarantee them a final payment of $75 million at the end of 40 yearsStep by Step Solution
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