Please choose one answer A,B,C, or D thank you
Homework Answers
The answer is A.
Explanation - The present value of lumpsum sum to be paid after 5 years should be equal to the PV of annual payments to be made every year. So,
$100000*0.681 = Annual Payments * 3.993
Annual Payments =$17,046.
Note- 8% percent has been used as the discounting factor and 3.993 is the sum of 0.926+0.857+0.794+0.735+0.681
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