opportunity cost is 6%, would you rather have $100,000 today or $200,000 10 years from now?...
opportunity cost is 6%, would you rather have $100,000 today or $200,000 10 years from now? Why?
What are the values to input into a financial calculator?
Homework Answers
Amount today= $ 100,000
Present Value of $ 200,000 to be received 10 years from now = $ 200,000*1/(1.06) ^ 10
= $ 111,678.9554
The present value of $ 200,000 10 years from now is more than $ 100,000 today. Hence, $ 200,000 10 years from now is a better option as it is more beneficial.
The correct answer is :
It is advisable to have $ 200,000 10 years from now.
----------------
Values for the financial calculator:
Discount Rate = 6%
Cash Flow in Year 10 = $ 200,000
Initial Investment = 0
Add Answer to:
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