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Find the value today of each alternative

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Question - In exchange for a R20,000 payment today, a well-known company will allow you to choose one of the alternatives shown in the following table. Your opportunity cost is 11%.

Alternative Single amount

A R28,500 at end of 3 years

B R54,000 at end of 9 years

C R160,000 at end of 20 years

Required -

1) Find the value today of each alternative.

2) Are all the alternatives acceptable - i.e. worth R20,000 today?

3) Which alternative, if any, will you take?

Reference no: EM133141471

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