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Question 1: You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of RM50,000 today or receive payments of RM641 a month for ten years. You can earn 6% on your money. Which option should you take and why?

Question 2: You have a sub-contracting job with a local manufacturing firm. Your agreement calls for annual payments of RM50,000 for the next five years. At a discount rate of 12 percent, what is this job worth to you today?

Reference no: EM132931255

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