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Which retirement plan has the highest present value at the

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M. Cansado is about to retire. He has a retirement account that allows two payment options. Under Option 1, he can choose to receive $140,000 at the end of six years. Under Option 2, he can choose to receive $20,000 at the end of each year for six years. An interest rate of 10% is applicable to both plans. (a) Which retirement plan has the highest present value at the beginning of the six-year period? (b) Which option would you recommend?

Reference no: EM13483680

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