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Problem 6: Time Value Comparison of Single Amounts Assume you need to choose one of the alternatives shown in the following table in exchange for
Problem 6: Time Value Comparison of Single Amounts Assume you need to choose one of the alternatives shown in the following table in exchange for a payment of $20,000 today. Alternative 1: $28,500 at the end of 3 years Alternative 2: $54,000 at the end of 9 years Alternative 3: $160,000 at the end of 20 years Required: a. Find the value today of each alternative assuming your opportunity cost is 11%. b. Are all the alternatives acceptable, meaning are they worth $20,000 today? c. Which alternative, if any, will you choose
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