You are trying to decide between two options. Option A: You can pay $50,000 this year to take a training class and earn $125,000 per year for the next two years Option B: You can start work this year and make $60,000 per year this year and each of the next two years. a. What is the Present Value of Option A assuming a 5% interest rate? b. What is the Present Value of Option B assuming a 5% interest rate? c. What is the Present Value of Option A assuming a 10% interest rate? d. What is the Present Value of Option B assuming a 10% interest rate?
You are trying to decide between two options. Option A: You can pay $50,000 this year to take a training class and earn $125,000 per year for the next two years Option B: You can start work this year and make $60,000 per year this year and each of the next two years. a. What is the Present Value of Option A assuming a 5% interest rate? b. What is the Present Value of Option B assuming a 5% interest rate? c. What is the Present Value of Option A assuming a 10% interest rate? d. What is the Present Value of Option B assuming a 10% interest rate?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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