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If You Have a Choice of Receiving a Cash Payment

Question 2

Multiple Choice

If you have a choice of receiving a cash payment of $5 today:


A) you are indifferent to receiving $5.07 next year if your opportunity cost is 7%.
B) you are indifferent to receiving $5.00 next year if your opportunity cost is 7%.
C) you are indifferent to receiving $5.35 next year if your opportunity cost is 10%.
D) you are indifferent to receiving $5.35 next year if your opportunity cost is 7%.
E) you are indifferent to receiving $5.10 next year if your opportunity cost is 10%.

Correct Answer:

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