Finance Problem: Choosing between Two Options
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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? Provide two solutions for this question ( Base your answer on present value calculations for the $1 million, and future value calculations for the $2,000.
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This solution provides a detailed, step by step computation of the given finance problem.
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We can decide based on the present value of cash flows or the future value
1. Present Value
Option 1 - $1 million in 50 ...
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