Suppose that, in their divorce settlement, Ashton Kutcher offers Demi Moore $10 million spread evenly over 10

Question:

Suppose that, in their divorce settlement, Ashton Kutcher offers Demi Moore $10 million spread evenly over 10 years, but she instead demands $5 million now. If the appropriate is 8 percent, which alternative is better for Ashton and which for Demi? What if the is 20 percent?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...