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(2) Your wealthy Aunt offers you a graduation gift. She will give you a $10,000 lump sum payment or 1,100/year for the next 10 years.
(2) Your wealthy Aunt offers you a graduation gift. She will give you a $10,000 lump sum payment or 1,100/year for the next 10 years. This is essentially a risk free gift from your standpoint. The risk free rate currently sites at 2.5%. Which will you take? Why? Please use the financial principles from the chapter to make this decision. show your work.
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