Which of the following decisions would involve the use of the present value of $1.00?
a. You win a lawsuit and are offered a lump sum payment today of $100,000.00 or $15,000.00 a year for 20 years.
b. You want to have $1,000,000.00 to retire at age 55, but you need to know how much you will need to deposit each year from now until your 55th birthday.
c. Your brother buys your car and offers to pay you $500.00 now or $1,500.00 in two years.
d. Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a $7,000.00 cruise when you graduate from college in four years.
Ans: d. Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a $7,000.00 cruise when you graduate from college in four years.
You might also like to view...
You would like to establish a trust fund that would provide annual scholarships of $100,000 forever. How much would you have to deposit today in one lump sum to achieve this goal if you can earn a guaranteed 4.5% rate of return?
a. 1,678,342 b. 1,800,000 c. 2,413,435 d. 1,620,975 e. 2,222,222
Which type of appeal reaches the more creative right side of the brain?
A) rational B) sex C) humor D) emotional