Multiple Choice
You have just turned 25 and may now spend a portion of the trust fund your parents established for you.The terms of the trust fund allow you to withdraw 60 beginning-of-the-year cash flows of $100,000 each.An investment firm has offered to pay you cash for all of the fund today.If the rate they use to discount the cash flows is 16% per year,what is their offer price today for your pension fund?
A) $4,605,750,853
B) $6,000,000.00
C) $624,915.20
D) $724,901.63
Correct Answer:
Verified
Correct Answer:
Verified
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