Business Finance
Time value of money

Question Description

An individual's opportunity cost is 12%, and the individual is offered to make a one-time payment in exchange for receiving $100,000 exactly 4 years from now. What is the maximum amount that this individual would be willing to pay now to receive the payment mentioned above? You may choose any period as the base period for determination of the time value of money.

Provide your work in detail and explain. Provide references for the content.

Final Answer

See attached:)

Running head: TIME VALUE OF MONEY

1

Time value of money
Name
Institution

TIME VALUE OF MONEY

2

The problem can be solved by applying the concept of the time value of money. As such,
we determined the present...

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