Question

I only need requirement 2,

Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following sce

Requirement 1 . Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest pres

Requirement 2. Would your preference change if you used a 10% discount rate? Begin by calculating the present value of each s

| | Present Vakue of $t Present Value of Ordinary Annuity of $1 1 0980 080 0971RE 0962943 0936 0R 0917 00 08 0B77 087O 0852 0Future Value ot Ordinary Annuity of $1 Future Value of $1 Perodsl 1% 12%|396 | 12% | 14% | 15% 000 1000 1.000 1.000 1000 1.00

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Answer #1

2) calculate present value if 10% discount rate :

Present value
Scenario 1 5750*4.355 = 25041
Scenario 2 50050
Scenario 3 99350*0.564 = 56033

Scenario 3 would be prefer if 10% discount rate

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