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You are considering two investment options. Option A will pay nothing for three years, but then it will pay $30,000 per year for five years.
You are considering two investment options. Option A will pay nothing for three years, but then it will pay $30,000 per year for five years. Option B will pay $40,000 for three years and $60,000 in the fourth year. All payments are made at year-end. If your required rate of return on these investments is 8 percent annually, what should you be willing to pay for: Option A? Option B?
Solve the question with excel and show the excel formulas.
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