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Your uncle offers you a choice of $112,000 in 10 years or $51,000 today. Use Appendix...

Your uncle offers you a choice of $112,000 in 10 years or $51,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the $112,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value

Your uncle offers you a choice of $112,000 in 10 years or $51,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the $112,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value
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Answer #1

Amount today will be compared with the present value of amount to be received later

Present Value = Amount*PVF(8%, 10 years)

= 112,000*0.463

= $51,856

Hence, it is better to receive $112,000 10 years later.

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