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When you graduate from college, your mother plans to give you a gift of $40,000 to start you on your way. However, to determine what
When you graduate from college, your mother plans to give you a gift of $40,000 to start you on your way. However, to determine what you learned in business school , your mother presents you with four options on how to receive the ginWhich of the four options presented by your mother will yield the greatest prosent value to you? Present Value of $1 Periods 2% 3% 4% 5% 6% 1 0.980 0.971 0.962 0.952 0.943 2 0.961 0.943 0.925 0.907 0.890 3 0.942 0.915 0.889 0.864 0.840 Present Value of Annuity of 51 Periods 2% 3% 4% 5% 6% 0.000 0.971 0.962 0952 0.943 2 1.942 1913 1,685 1859 1.633 3 2.884 2.829 2.775 2.723 2673 A Alumo sum of $40,000 today OB Alump sum of $40,000 after grad school (2 years) assuming a 3% dincourt rate OC 520,000 per year for the next 2 years using a 3% discount rate OD Alump sum of $40,000 after grad school (2 years) assuming a 4% discount rate
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