Question

In: Finance

Congratulations! You are the inventor of a new technological marvel and you have received several offers...

Congratulations! You are the inventor of a new technological marvel and you have received several offers from various tech companies for the rights to market your new invention. To decide which offer to accept, you must determine the PV of each offer and choose the one that is the highest.
Calculate the PV of each offer listed below using an 8% discount rate. Use the Appendices and then verify your answers using the time value functions on your calculator.
7. __________________ $150,000 per year for 5 years + $200,000 per year for the next 5 years.
The best option is _________________.

Solutions

Expert Solution

Discount rate = 8%

PV of $150,000 per year for 5 years

PV of $200,000 per year for the next 5 years.

The best option is $150,000 per year for 5 years as it has the highest PV


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