Businessweek magazine currently offers the following subscription options: one year for $39; two years for $72; three years for $103. These rates are expected to increase at the general inflation rate. You may expect the general inflation rate to be between 3% and 7%. What is your optimal strategy for subscribing at the lowest possible cost, assuming you intend to be a lifetime subscriber? What other assumptions are required in order to make your purchase?

Businessweek magazine currently offers the following subscription options: one year for $39; two years for $72; three years for $103. These rates are expected to increase at the general inflation rate. You may expect the general inflation rate to be between 3% and 7%. What is your optimal strategy for subscribing at the lowest possible cost, assuming you intend to be a lifetime subscriber? What other assumptions are required in order to make your purchase?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section5.A: Continous Compounding And Discounting

Problem 1P

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