11.6

Your grandfather would like to share some of his forfune with you. He offers to give you maney under one of the following scenarios (you get to choose) 1,$7,250 per yoar Bt the end of each of the next eight yours 2. $49,650 (lump sum) now 3. $98,650 (lump sum) eight years fram now (Click the icon to view Present Value of 51 table.) (Cick the icon to view Present Value of Ordinary Annuty of \$1 tabio.) Read the regutements Requirement 1, Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? (Round the factors to three docimal piacee. X Xox Round the presont vilue to the nearest whole dollar) Scenario 1, b\% disount rate, Prosent watue = Reference Present Value of Ordinary Annuity of $1 Requirements 1. Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? Round to the nearest whole dollar. 2. Would your preference change if you used a 10% discount rate