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Is this true about dollar store products? |
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if a dime is worth more than a nickel, then why is a nickel coin smaller than a dime coin? |
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Agora Voice Messaging Scam? |
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Managerial Accounting 4? |
Martin Company incurred the following costs for 50,000 units:
Variable costs $180,000
Fixed costs 240,000
Martin has received a special order from a foreign company for 5,000 ... |
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how much money can the bank loan me? |
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I got caught stealing and im scared.? |
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I have a question on loans.? |
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What kind of account is a disposal account? |
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Check Cashing??????...........................… |
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Has anyone here found a legitimate way to make money online? |
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Yang Lu | financial problem!!! Need help!!!? |
Your rich uncle has offered you a choice of one of the following three alternatives: $10,000 now; $2,000 a year for eight years; or $24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative would you choose? If you could earn 12% annually, would you still choose the same alternative?
Thank you so much !!! |
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Don G
|
At 11%, PV of 10,000 now = 10,000. PV ANN of 2,000 for 8 yrs = 10,292.
PV of 24,000 at T8 = 10,414
At 12%, PV of 10,000 now = 10,000. PV ANN of 2,000 for 8 yrs = 9,935.
PV of 24,000 at T8 = 9,693
Note that the PV decreases as the rate increases. Why? Because an investment today (at its PV), earning 12% will be worth more in the future than one earning 11%.
So at 11%, take the $24,000 in 8 yrs. At 12%, take the $10,000 today. |
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