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The following offers were made to four workers who were retiring at the same time from the same company. Worker 1: Receive 360 monthly payments
The following offers were made to four workers who were retiring at the same time from the same company. Worker 1: Receive 360 monthly payments of $1,200 starting at the end of the month or a single sum of $130,000 now. Worker 2: Receive 360 monthly payments of $1,200 starting at the beginning of the month or a single sum of $125,000 now. Worker 3: Perpetual monthly payments of $1,500 starting at the end of the month or a single sum of $200,000 now. Worker 4: Perpetual monthly payments of $1,500 which start in 12 months' time or a single sum of $220,000 now.. a) Assuming a positive discount rate, are the choices Worker 2 receives sensible given the choices Worker 1 receives? Explain - you don't have to do any calculations. b) Assuming a positive discount rate, are the choices Worker 3 receives sensible given the choices Worker 4 receives? Explain - you don't have to do any calculations. (5 marks) The following offers were made to four workers who were retiring at the same time from the same company. Worker 1: Receive 360 monthly payments of $1,200 starting at the end of the month or a single sum of $130,000 now. Worker 2: Receive 360 monthly payments of $1,200 starting at the beginning of the month or a single sum of $125,000 now. Worker 3: Perpetual monthly payments of $1,500 starting at the end of the month or a single sum of $200,000 now. Worker 4: Perpetual monthly payments of $1,500 which start in 12 months' time or a single sum of $220,000 now.. a) Assuming a positive discount rate, are the choices Worker 2 receives sensible given the choices Worker 1 receives? Explain - you don't have to do any calculations. b) Assuming a positive discount rate, are the choices Worker 3 receives sensible given the choices Worker 4 receives? Explain - you don't have to do any calculations. Number List T T T Arial ABO 3 (12pt) i >>> Path: P Words:0
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