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Congratulations! You have just won the Magazine Peddlers Sweepstakes! Spokesman Ferd McMoney has indicated that you have the choice of receiving $25,000 a year for
Congratulations! You have just won the Magazine Peddlers Sweepstakes! Spokesman Ferd McMoney has indicated that you have the choice of receiving $25,000 a year for the next 15 years with the first payment to be provided today or, alternatively, $220,000 in cash. If you believe that your opportunity cost or return is 896, based on the concept of time value, which should you choose? There is not enough information provided to answer the question based on time value of money concepts The S22o,ooo cash payment The values are equivalent and either is acceptable based on the information The S25,000 per year for 15 years
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