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Sagot :
I would take the option of receiving $15 million today.
Which option would I take?
In order to determine which option I would choose, I would have to determine the present value of option A. Present value is the sum of discounted cash flows. I would choose the option that gives the higher present value.
Present value of option A = 1/(1.08) + 1/ (0.8^2) + 1/(1.08^3) + 1/(1.08^4) + ... 1/(1.08^30) = 11.25 million
To learn more about present value, please check: https://brainly.com/question/25748668
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