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Time value of money

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Sharon Smith will receive $1 million in 50 years. The discount rate is 14. As an alternative, she can receive $2,000 today. Which should she choose?
$1 million dollars in 50 years
$2,000 today
she should be indifferent
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Solution Summary

The solution explains how to choose among alternatives using the time value of money

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In order to make the decision we need to compare the present value of the two alternatives.
$2,000 is to be received today, so the ...

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