You have just won a magazine sweepstakes and have a choice of three alternatives.You can get $100 000 now, or $10 000 per year in perpetuity, or $50 000 now and $150 000 at the end of 10 years.If the appropriate discount rate is 12%, which option should you choose?
A)$100 000 now
B)$10 000 perpetuity
C)$50 000 now and $150 000 in 10 years
D)$5000 perpetuity

Question

Quizplus · Accepted Answer

The Answer of You have just won a magazine sweepstakes and have a choice of three alternatives.You can get $100 000 now, or $10 000 per year in perpetuity, or $50 000 now and $150 000 at the end of 10 years.If the appropriate discount rate is 12%, which option should you choose?
A)$100 000 now
B)$10 000 perpetuity
C)$50 000 now and $150 000 in 10 years
D)$5000 perpetuity

You Have Just Won a Magazine Sweepstakes and Have a Choice