Question
You are considering two insurance settlement offers. The first offer includes annual payments of $50,000 a year for 5 years with the first payment made
You are considering two insurance settlement offers. The first offer includes annual payments of $50,000 a year for 5 years with the first payment made today. The other offer is the payment of one lump sum amount today. You are trying to decide which offer to accept given the fact that your discount rate is 12%. What is the minimum amount that you will accept today if you are to select the lump sum offer?
| a. | $195,618.19 | |
| b. | $180,238.81 | |
| c. | $197,548.53 | |
| d. | $201,867.47 | |
| e. | $214,142.50 |
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Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
8th Edition
0324065914, 9780324065916
