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y 25 pts Bob's dad offers to give him one of the following two options: a cash gift of $15,000, or an interest free loan
y 25 pts Bob's dad offers to give him one of the following two options: a cash gift of $15,000, or an interest free loan of $60,000. The loan is repaid in five equal annual payments over the subsequent five years. Assume Bob's opportunity cost of funds is 5.0%. In present value terms, which option is better for Bob, and how much better is it? The loan, by $12,988.43 The loan, by $21,307.58 The cash gift, by $6.953.72 The cash gift, by $32,809.50
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