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You can receive $10,000 today or $3,000 per year for the next five years. If the required rate of return is 10%, what option should
You can receive $10,000 today or $3,000 per year for the next five years. If the required rate of return is 10%, what option should be selected? (The present value of an ordinary annuity at 10% for five periods is 3.7908. The present value of one at 10% for five periods is 0.6209.)
A. | Receive $3,000 per year for the next five years. | |
B. | Receive $10,000 today | |
C. | The results are the same for both options. | |
D. | Neither option is desirable. |
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