Decision-making using Net present value analysis.

Sandy Rose was given two options for receiving her winnings, if she won, from the Reader's Digest sweepstakes. Option A is a payment of $1 million immediately, plus $137,932 per year for the next 29 years. Option B is an immediate payment of $167,000, plus additional payments of $167,000 per year for the next 29 years. Which option should she choose and why? (assume no taxes).

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...ption A Option B
1 1,000,000 167,000 10% 1.10 909,091 151,818
2 137,932 167,000 10% 1.21 113,993 138,017
3 137,932 167,000 10% 1.33 103,630 125,470
4 137,932 167,000 10% 1.46 94,209 114,063
5 137,932 167,000 10% 1.61 85,645 103,694
6 137,932 167,000 10% 1.77 77,859 94,267
7 137,932 167,000 10% 1.95 70,781 85,697
8 137,932 167,000 10% 2.14 64,346 77,907
9 137,932 167,000 10% 2.36 58,497 70,824
10 137,932 167,000 10% 2.59 53,179 64,386 ...