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It must be solved using a business calculator. (N, I, PMT, PV, etc) Iron Man has been offered an investment that will pay him $250,000
It must be solved using a business calculator. (N, I, PMT, PV, etc)
Iron Man has been offered an investment that will pay him $250,000 per year starting on his 35th birthday and continuing until his 50th birthday (his last payment of $250,000 will occur on his 50th birthday). He then will receive $40,000 every six months, with the first of these coming six months after his last payment of $250,000, and continuing until his 90th birthday (that will be his last payment of $40,000). Finally he will receive : $29,000,000 one year after his last payment of $40,000. Assuming each is celebrating their 30 birthday today, each will be around until the end of the investment payments, they have a 10% (semi-annual), which of them has the best offer? SHOW ALL WORK and make your decision using the present value concept. Iron Man has been offered an investment that will pay him $250,000 per year starting on his 35th birthday and continuing until his 50th birthday (his last payment of $250,000 will occur on his 50th birthday). He then will receive $40,000 every six months, with the first of these coming six months after his last payment of $250,000, and continuing until his 90th birthday (that will be his last payment of $40,000). Finally he will receive : $29,000,000 one year after his last payment of $40,000. Assuming each is celebrating their 30 birthday today, each will be around until the end of the investment payments, they have a 10% (semi-annual), which of them has the best offer? SHOW ALL WORK and make your decision using the present value conceptStep by Step Solution
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