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Present-value comparison Much to your surprise you were selected to appear on the TV show The Price is Right As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportunity to choose one of the folowwing $1,700 today, $11,000 in 15 years or $ 26,000 in 28 years. Assuming that you can earn 11 percent on your money, which should you choose.

1. Round to nearest cent-

2. If you were offered $26,000 in 28 years and can earn 11 percent on your money what is the present value of $26,000?

Round to nearest cent-

3.Which offer should you choose

a. Choose $1,700.00 today because its present value is the highest
b.Choose $2,600.00 in 28 years because its present value is the highest
c. Choose $11,000.00 in 15 years because its present value is the highest

Financial Accounting, Accounting

  • Category:- Financial Accounting
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