
Chartered Financial Analyst Level 1
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An investor is evaluating three payment options from an investment with an annual discount rate of 8%. The options are:
· Option 1: A lump sum of 12,000, starting one year from today.
· Option 3: 20 annual payments of $13,000, starting immediately.
Which option has the highest present value?
An investor is evaluating three payment options from an investment with an annual discount rate of 8%. The options are: · Option 1: A lump sum of 12,000, starting one year from today. · Option 3: 20 annual payments of $13,000, starting immediately. Which option has the highest present value?
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