Question
Given a choice between $1,000 a year for 8 years with the first payment paid today vs. a single lump-sum payment of $6500 today, assuming
Given a choice between $1,000 a year for 8 years with the first payment paid today vs. a single lump-sum payment of $6500 today, assuming the market rate is 5%, a rational investor would:
A. Have no idea what to do
B. Be indifferent regarding the choice
C. Prefer $1,000 a year
D. Prefer the lump sum of $6500 today
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Financial Accounting An Introduction
Authors: Pauline Weetman
4th Edition
0273703404, 978-0273703402
