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Problem regarding the choice of a lump-sum

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Mr. Jackson has been awarded a bonus for his outstanding work. His employer offers him a choice of a lump-sum of $5,000 today, or an ordinary annuity of $1,000 a year for the next five years followed by an annuity of $500 a year for years 6-10. Which option should Mr. Jackson choose if his opportunity cost is 9 percent?

Reference no: EM131093265

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