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Temka [501]
3 years ago
7

Assume you win the lottery and have a choice to receive your winnings one of two ways. Option 1: Payments of $50,000 per year fo

r each of the next 5 years Option 2: A single payment of $200,000 immediatelyWhich of the following statements is most correct?A Option 1 is preferred over Option 2.B Option 2 is preferred over Option 1.C Option 1 and Option 2 are equivalent.D The value of Option 1 is greater than the value of Option 2 because the total cash flow is greater.E There is not enough information to answer this question.
Business
1 answer:
mojhsa [17]3 years ago
7 0

Answer:

Option D is correct.

Explanation:

In the option 1 we receive $250,000 but in the second option we receive total amount that is $200,000. But their is an issue which is time value money. If the inflation is lower then it is possible we receive higher value in real terms. If we have an opportunity to invest in a project or company with required return provided then it would be the best option to invest in. Overall option D is correct because the level of question is High School.f

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melamori03 [73]

Answer:

The correct answer is C. This opportunity seems like a poor investment given the neutrality of money, the decline in real GDP, and the high unemployment rate.

Explanation:

In the present case, the country of Paradisia has had a growth in nominal GDP (that is, not updated by inflation or purchasing power) of 400%, but in turn has had annual inflation of 500%, with which the country's real GDP has not grown, but has instead contracted, since its currency has depreciated more than what its nominal production has grown.

In addition, it has an unemployment rate of 20%, which indicates a total lack of economic dynamism, that is, that there are not enough employers for all its inhabitants, which makes it presume an adverse economic scenario for investment.

Therefore, in view of these macroeconomic data, the proposed investment is inadvisable.

4 0
4 years ago
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rjkz [21]

Answer:

A or C

Explanation:

by labeling it means to understand, but B and D were wrong because this is not that topic

5 0
3 years ago
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zavuch27 [327]

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Explanation:

1. Positive Attitude -. The candidate should have a optimistic thinking towards every situation he/she faces.

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Answer:

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Explanation:

7 0
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