An obligation can be settled by making a payment of $8,500 now and a final payment of $8,000 in two years (Alternative 1
Posted: Mon Jul 11, 2022 12:49 pm
An obligation can be settled by making a payment of $8,500 now and a final payment of $8,000 in two years (Alternative 1). Alternatively, the obligation can be settled by payments of $1,200 at the end (Alternative 2). Interest is 11% compounded semi-annually. Compute the present value of each alternative and determine
Or every six months for seven vears
the preferred alternative according to the discounted cash flow criterion.
The present value of Alternative 1 is $???
Or every six months for seven vears
the preferred alternative according to the discounted cash flow criterion.
The present value of Alternative 1 is $???