Contract with signing bonus

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Reference no: EM131570179

You are offered a contract with a signing bonus. If they offered you either $215,000 in cash or $2,000 a month for 15 years, guaranteed, which do you take (based strictly on the math)? Your safe rate of return is 7.5%. Computer the value of the $2,000 a month here: Which is greater? The lump sum or the cash flow?

Reference no: EM131570179

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