Your grandfather would like to share some of his fortune with you. He offers to...
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Accounting
Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose):
1. $7,250 per year at the end of each of the next eight years 2. $49,650 (lump sum) now 3. $98,650 (lump sum) eight years from now
1. Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? Round to nearest whole dollar. 2. Would your preference change if you used a 10% discount rate?
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