Question
Gina Vitale has just contracted to sell a small parcel of land that she inherited a few years ago. The buyer is willing to pay
Gina Vitale has just contracted to sell a small parcel of land that she inherited a few years ago. The buyer is willing to pay $19340 at the closing of the transaction or will pay the amounts shown in the following table at the beginning of each of the next 5 years. Because Gina doesnt really need the money today, she plans to let it accumulate in an account that earns 6% annual interest. Given her desire to buy a house at the end of finve years after closing on the sale of the lot, she decided to choose the payment alternative-19340 single amount or the mixed stream of payments in the table that proviedes the higher future at the end of 5 years. Which alternative will she choose?
Table Mixed Stream
1=>3000
2=>5000
3=>4000
4=>4000
5=>9000
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