SOLVE IT PLZ Evaluate the following cash flows (at 5.0% interest rate) Option 1:

Question

SOLVE IT PLZ

Evaluate the following cash flows (at 5.0% interest rate) Option 1: Receive dollar 15000 today; Option 2: Receive dollar 30,000 in ten years; Option 3: Receive dollar 3000 each year for the next ten years What is the future worth of option 1 ? Evaluate the following cash flows (at 5.0% interest rate) Option 1: Receive dollar 15000 today; Option 2: Receive dollar 30,000 in ten years; Option 3: Receive dollar 3000 each year for the next ten years What is the present worth of option 2?

Explanation / Answer

1)

future worth = 15000 * (1.05)^10 = 24433.42

answer d

2)

Present worth = 30000/1.05^10 = 18417.40

amswer is C

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