John has received a college scholarship and can choose whether to receive it as an immediate...

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.

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

As nothing was mentioned excel is used.

jeff jeffy answered 3 weeks ago

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