Which alternative will she choose

Reference no: EM131111481

Gina Vitale has just contracted to sell a small parcel of land that she inherited a few years ago. The buyer is willing to pay $24,000 at the closing of the transaction or will pay the amounts shown in the following table at the beginning of each of the next 5 years. Because Gina doesn't really need the money today, she plans to let it accumulate in an account that earns 7% annual interest. Given her desire to buy a house at the end of 5 years after closing on the sale of the lot, she decides to choose the payment alternative-$24,000 single amount or the mixed stream of payments in the following table-that provides the higher future value at the end of 5 years. Which alternative will she choose?

Mixed stream

Beginning of year Cash flow

1 .......... $ 2,000

2 .......... 4,000

3 .......... 6,000

4 .......... 8,000

5 .......... 10,000

Reference no: EM131111481

Questions Cloud

Write a paper on multicultural education : Early childhood education is an important phase of education. It is the child's first experience of formal learning. At this stage, academic proficiency is not so significant as the development of like skills like hygiene, socialization, good habits ..

The simple linear regression relating number of employees : Refer to the simple linear regression relating number of employees y to age x of a fast-growing firm, Exercise 9.21 (p. 487).The SAS printout is reproduced on the next page.

Explain the core principles or features of the deontological : Body Paragraphs Each paragraph in the body should start with a topic sentence that clearly identifies the main idea of the paragraph. ?Theory explanation Explain the core principles or features of the deontological or utilitarian theory and the ge..

Vlsm and explain it step by step : Submit a memo explaining the following two topics: VLSM (details on VLSM please do some research)

Which alternative will she choose : single amount or the mixed stream of payments in the following table-that provides the higher future value at the end of 5 years. Which alternative will she choose

Write a program that uses recursive method : A palindome is a string that reads the same both forward and backward. For example, the string "madam" is a palindrome. Write a program that uses a recursive method to check whether a string is a palindome.

List the four functions of management : Describe the specific industrial/organizational (I/O) psychology practices you would use with each of the four managerial functions. Explain how their adoption might improve organizational goal attainment.

Determining the cryptographic techniques : What cryptographic techniques through the use of Internet Security Protocols can Alice use for securing her business processes between customer and her business?

Share critical insights and questions that you are working : This discussion forum is an opportunity for you to explore topics that interest you, share critical insights and questions that you are working with, share your struggles and triumphs.

User Account

All Pages