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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): Use the Present Value of \$1 or the Present Value of Ordinary Annuity of $1 tables from above. Round final present value to the nearest whole number. When calculating the present values, be sure to use the full present value factor or annuity factor to 2 decimal places in your calculations. Note that the answer key will show the values rounded to 2 decimal places due to display limitations. A. Calculate the present value of each scenario using an 4% discount rate and rank your choices. 1) $8,060 per year at the end of each of the next 4 year(s). 2) $44,000 (lump sum) now. 3) $86,700 (lump sum) 4 year(s) from now. B. Calculate the present value of each scenario using an 7% discount rate and rank your choices. 1) $8,060 per year at the end of each of the next 4 year(s). 2) $44,000 (lump sum) now. 3) $86,700 (lump sum) 4 year(s) from now. 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): Use the Present Value of \$1 or the Present Value of Ordinary Annuity of $1 tables from above. Round final present value to the nearest whole number. When calculating the present values, be sure to use the full present value factor or annuity factor to 2 decimal places in your calculations. Note that the answer key will show the values rounded to 2 decimal places due to display limitations. A. Calculate the present value of each scenario using an 4% discount rate and rank your choices. 1) $8,060 per year at the end of each of the next 4 year(s). 2) $44,000 (lump sum) now. 3) $86,700 (lump sum) 4 year(s) from now. B. Calculate the present value of each scenario using an 7% discount rate and rank your choices. 1) $8,060 per year at the end of each of the next 4 year(s). 2) $44,000 (lump sum) now. 3) $86,700 (lump sum) 4 year(s) from now
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