Question
Marilyns parents have agreed to help her purchase a new car upon graduation in four years. They have given her two choices. The first choice
Marilyns parents have agreed to help her purchase a new car upon graduation in four years. They have given her two choices. The first choice is that they will give her $3,640each year for the next four years for her to invest herself. The second choice is that they will wait four years and give her $16,330. Marilyn can invest the money at a5%rate.
| Option 1 | Option 2 | |
| Present value |
|
What is the present value of option one and option two?
Which option shouldMarilyn take?
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Fundamental Accounting Principles Volume I
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
978-1260305821
