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. $8,750 per year at the end of each of the next seven years

2. $50,250 ?(lump sum) now

3. $98,650 (lump sum) seven years from now

Requirement

1.	Calculate the present value of each scenario using a 6?% discount rate. Which scenario yields the highest present? value? Round to the nearest whole dollar.
2.	Would your preference change if you used a 12?% discount? rate?

Safari File Edit View History Bookmarks Window Help mathxl.com Student Login -One SPC MyAccountingLab CH 25 & 26 Homework - ACG2071 Managerial Accountin... Do Homework - Alexandra Baker ACG 2071 136 (515) Alexandra Baker 7/2/16 6:00 PM Homework: Homework CH26 Save Score: 0 of 5 pts 4 of 104 complete) HW Score: 29.17%, 29.17 of 100 pts S26-10 (similar to) Question Help Reference Your grandfather would like to 1. S8,750 per year at the end 2. $50,250 (lump sum) now 3. $98,650 (lump sum) seven Present Value of $1 (Click the icon to view the Present Value Periods 1% 2% 3% 4% 5% 6% 7% 8% 996 10% 12% 14% 15% 16% 18% Requirement 1. Calculate the present 2. 20% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 2. Would your preference Would your preference 4 Requirement 1. Calculate the nearest whole dollar.) the present value to the 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.5470.513 0.452 0.400 0.376 0.354 0.314 0.279 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 Present Valu Scenario 1 9 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 Enter any number in the edit Print Done Clear All Check Answer remaining