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# Your grandfather has offered you a choice of one of the three following alternatives \$9500 now \$4000 a year for seven years or \$51000 at the end of seven years Use Appendix B and Appendix

Your grandfather has offered you a choice of one of the three following alternatives: \$9,500 now; \$4,000 a year for seven years; or \$51,000 at the end of seven years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a-1. Assuming you could earn 11 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

a-2. Which alternative should you choose?

 \$51,000 received at end of seven years \$4,000 received each year for seven years \$9,500 received now

b-1. If you could earn 12 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

b-2. Which alternative should you choose?

 \$51,000 received at end of seven years \$4,000 received each year for seven years \$9,500 received now

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Apr 04 2020 View more View Less