![E11-6 Comparing Options Using Present Value Concepts [LO 11-S1] After hearing a knock at your front door, you are surprised t](http://img.homeworklib.com/questions/41756880-9c99-11ea-8d0f-4de76cf9a502.png?x-oss-process=image/resize,w_560)
Homework Answers
(1)
Option A:-
Amount Received * PV Annuity Factor (13%,20 years)
$1200000 * 7.02475 = $8429700
Option B:-
Received Today = $9000000
Option C:-
Received Today + Amount received for 20 years * PV Annuity Factor (13%,20 years)
$3000000 + ($900000 * 7.02475)
= $9322275
(2) Option C is preferable
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E11-6 Comparing Options Using Present Value Concepts [LO 11-S1] After hearing a knock at your front...
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