Boyer Slick, your insurance agent, proposed to you an annuity contract offered by his firm. It...

Boyer Slick, your insurance agent, proposed to you an annuity contract offered by his firm. It requires an investment of $20,000 and will pay $2,500 per year for the next 20 years. You believe an appropriate required rate of return on an investment of this risk class is 8.5%.
a. Evaluate this investment using the present value approach and recommend its acceptance or rejection.
b. Now evaluate this investment using the rate of return approach and make the appropriate recommendation based on your finding.

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jeff jeffy answered 2 years ago

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