The winner of a competition is offered two options for the payment of their prize:...
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Accounting
The winner of a competition is offered two options for the payment of their prize:
Option 1: Payment of $100,000 today and now
Option 2: Payment of $9,000 annually, in perpetuity
Assuming no cost at present, an opportunity rate is 8% per year, and based on what you saw in class, which of the prize options should you choose? Justify your answer.
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