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You Can Receive $10,000 Today or $3,000 Per Year at the End

Question 36

Multiple Choice

You can receive $10,000 today or $3,000 per year at the end of each year for the next five years.If the required rate of return is 10%,what option should be selected? (The present value of an ordinary annuity of one at 10% for five periods is 3.7908.The present value of one at 10% for five periods is 0.6209.)


A) Receive $10,000 today.
B) Receive $3,000 per year for the next five years.
C) The results are the same for both options.
D) Neither option is desirable.

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