Homework Answers
| scenario 1 | |||||
| 1) 8750 a year at the end of each of the next eight year | |||||
| present value = 8750*5.747 = 50286.25 | |||||
| 2) lumpsum now = 48750 | |||||
| 3) 99350 (lump sum) eight year from now | |||||
| present value = 99350*0.540 = 53649 | |||||
| Highest net present value = 53649 | |||||
| scenario 2 | |||||
| 1) 8750 a year at the end of each of the next eight year | |||||
| present value = 8750*5.335 = 46681.25 | |||||
| 2) lumpsum now = 48750 | |||||
| 3) 99350 (lump sum) eight year from now | |||||
| present value = 99350*0.467 = 46396.45 | |||||
| Highest present value = 48750 | |||||
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