(Answered) Milion pounds in a new cosmetics

Economics

Problem: Suppose you are offered free of charge one from each of the following pairs of assets

Required:

a. perpetuity that pays 20000 pounds per year for ever, or an annuity that pays 100000 pounds per year for 5 years

b. an oil-driling company that earned 100000 pound after cooperate taxes last year or British government that paid 100000pounds in intrest last year

c. a 1 percent share in a new company that has invested10 milion pounds in a new cosmetics that thought to appeal to middle in come women or a 100000pound bond that has been issued by the same company.what considerations would determine your choice in each case?

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Macroeconomics, Economics

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