Question
You inherit $554,000. You can receive the $554,000 in one lump sum payment today or, alternatively, receive two amounts: $354,000 in 11 months and $220,000
You inherit $554,000. You can receive the $554,000 in one lump sum payment today or, alternatively, receive two amounts: $354,000 in 11 months and $220,000 in 21 months from today. If you can earn 5.7% per annum compounding monthly on your monies, what is the value of the option to receive two payments (in present day value)?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
2nd Edition
0324289235, 9780324289237
