Managerial Finance 476 (II)
Not what you're looking for?
19. Your grandfather has offered you a choice of one of the three following alternatives:
$5,000 now; $1,000 a year for eight years; or $12,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?
Purchase this Solution
Solution Preview
This is a question of present value
<br>PV=FV/(1+r)^t
<br>
<br>1. if discount rate is 11%
<br>Then the $1000 annuity is computed:
<br>Payment=1000, T=8, Interest Rate=0.11, compute ...
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.