In: Finance
John has received a college scholarship and can choose whether to receive it as an immediate one-time payment of $10000 or as a series of four equal payments (at the end of each year), each totaling $3000. Assume that John has a discount rate of 10%. Only considering TVM principles, which option is most valuable to John?
A. There is not enough information to determine the answer.
B. Series of four payments of $3000 each.
C. Immediate payment of $10000.
D. Both scenarios are equal.
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As nothing was mentioned excel is used.