Question
1.Congratulations. You have just won a sweepstakes prize. The prize allows you to choose the method of payment. Prize A. Receive $10,000 today. Prize B.
1.Congratulations. You have just won a sweepstakes prize. The prize allows you to choose the method of payment.
Prize A. Receive $10,000 today.
Prize B. Receive $1,000 today, followed by the amount of $1,000 received at the end of each year for the next 15 years beginning one year from today.
Which alternative will you choose if the interest rate stays at 8%? Please show work.
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
14th edition
007745443X, 978-0073530727, 73530727, 978-0077454432
