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Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you
Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose): 1. $8,000 per year at the end of each of the next five years 2. $47,950 (lump sum) now 3. $98,150 (lump sum) five years from now (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Present Value of Annuity of $1 table.) (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Future Value of Annuity of $1 table.) Requirements Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? Would your preference change if you used a 10% discount rate? 1. 2. Requirement 1. Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? Begin by calculating the present value of each scenario using an 8% discount rate. (Round the amounts to the nearest dollar.) Present Value Scenario 1
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