Answer:
First option will be recommended.
Explanation:
To determine which option to be taken, we calculate the net present value each option generates. The option generating higher NPV should be recommended.
- Net present value of first option = Lump sum receipt = $150,000.
- Net present value of second option will be found by discounting cash flows at investing rate 12% and calculated as followed:
+ Present value of 20 equal annual payment of $14,000 + Present value of $60,000 paid in 20 years = (14,000/12%) x [ 1 - 1.12^(-20)] + 60,000/1.12^20 = $110,792.
As net present value of the first option is higher than the second option, first option will be recommended.
Had to look for the options and the answer the best fits the blank provided is PREEMPTIVE. When we say preemptive right, this is the right granted to certain shareholders in order for them to buy additional shares in the company. Hope this answers your question.
Drinking from a fresh water bottle in dimensions
Corporate culture is important as it guides how the workers in a company act and think.
<h3>What is corporate culture?</h3>
It should be noted that corporate culture simply means the behaviors that determine how the employees of a company interact.
In this case, corporate culture is important as it guides how the workers in a company act and think.
Learn more about culture on:
brainly.com/question/25010777
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