You have just won a magazine sweepstakes and have a choice of three alternatives. You can get $100,000 now, or $10,000 per year in perpetuity, or $50,000 now and $150,000 at the end of 10 years. If the appropriate discount rate is 12%, which option should you choose?
A) $100,000 now
B) $10,000 perpetuity
C) $50,000 now and $150,000 in 10 years

Question

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The Answer of You have just won a magazine sweepstakes and have a choice of three alternatives. You can get $100,000 now, or $10,000 per year in perpetuity, or $50,000 now and $150,000 at the end of 10 years. If the appropriate discount rate is 12%, which option should you choose?
A) $100,000 now
B) $10,000 perpetuity
C) $50,000 now and $150,000 in 10 years

You Have Just Won a Magazine Sweepstakes and Have a Choice