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Business, 03.04.2020 18:07 lakhwinder6588

When you graduate from college, your mother plans to give you a gift of $40,000 to start you on your way. However, to determine what you learned in business school, your mother presents you with four options on how to receive the gift. Which of the four options presented by your mother will yield the greatest present value to you?A lump sum of $40,000 after grad school (2 years) assuming a 7% discount rate.
B. A lump sum of $40,000 after grad school (2 years) assuming a 2% discount rate.
C. A lump sum of $40,000 today.
D $20,000 per year for the next 2 years using a 2% discount rate.

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