Question
You win the lottery! Your choices are Take $25 million today. Take $1 million today and $1 million every year for the next 49 years
You win the lottery! Your choices are
- Take $25 million today.
- Take $1 million today and $1 million every year for the next 49 years (a total of $50 million)
a) If the interest rate is 0.1% compounded annually, which would you prefer?
b) If the interest rate is 4% compounded annually, which would you prefer?
c) At what annual interest rate would you be indifferent between the two?
please use excel and GOAL SEEK FOR 2C
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International Financial Management
Authors: Cheol S. Eun, Bruce G.Resnick
6th Edition
71316973, 978-0071316972, 78034655, 978-0078034657
