You are given the choice between receiving $100,000 today or $100,000 in one year.Which of the following statements is accurate?
A) You would prefer to receive $100,000 today,as you could invest the money and in one year have much more than the original $100,000.
B) You would prefer to receive $100,000 today,as the present value of receiving $100,000 in one year is much less than $100,000.
C) You would prefer to receive $100,000 today due to the time value of money.
D) All of the above statements are accurate.
E) None of the above statements are accurate.
Correct Answer:
Verified
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A)PV =
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