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Your friend Tom is the beneficiary of a life insurance policy where he can choose one

Your friend Tom is the beneficiary of a life insurance policy where he can choose one of three options:

1.

$120,000 in cash upon selecting the option.

2.

$6,000 at the end of each quarter for five years.

3.

$30,000 in cash plus $9,000 at the end of each quarter for 3years.

Tom asks you which option to exercise. What option would you suggest? Assume an annual interest rate of 12%. (Show yourwork.)

May 02 2018 Read more Less More

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