Alternative of lump sum payment


Problem: Mark Grace Inc. has $572,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is to receive a single lump sum payment of $1,900,000 at the end of the 12 years. Which alternative should Grace select? Assume the interest rate is constant over the entire investment.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Alternative of lump sum payment
Reference No:- TGS01799424

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)