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YOUR GRANDFATHER HAS OFFERED YOU A CHOICE OF ONE

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1. (15 points) Your grandfather has offered you a choice of one of the theefollowing alternatives: $4500 now; $1000 at the beginning of each period for six years, or $8000 at the end of six years. Assuming you could earn 12% annually.

Required:

(1) Calculate the Present Value of each choice

(2) State which alternative should you choose?

 

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