Question
As a winner of a Lottery, you have 3 offers to be paid. (You can invest your money at 10% per year) : Offer I
As a winner of a Lottery, you have 3 offers to be paid. (You can invest your money at 10% per year) :
Offer I : an annual Perpetual Payment of $500,000 starting 3 years from now
Offer II : 2 payments of $3,000,000 each . The first is in 2 years from now and the second is in 5 years from now
Offer III : a lumpsum amount (C) that you can receive now
a) How much should be the amount (C) so that you will be indifferent between Alternatives I & III ?
b) If the lumpsum amount (C ) is $4,000,000, which offer will be the best one?
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Succeeding in Business with Microsoft Excel 2013 A Problem Solving Approach
Authors: Debra Gross, Frank Akaiwa, Karleen Nordquist
1st edition
978-1285099149, 9781285963969, 1285099141, 1285963962, 978-1285715346
