Fin419 Principles of Managerial Finance: P5-29 Gina Vitale has just contracted to sell

Fin419 Principles of Managerial Finance
P5-29 Future value of lump sum versus a mixed stream
Gina Vitale has just contracted to sell a small parcel of land that she inherited a few years ago. The buyer is willing to pay $24,000 at the closing of the transaction or will pay the amounts shown in the following table at the beginning of each of the next 5 years. Because Gina doesn’t really need the money today, she plans to let it accumulate in an account that earns 7% annual interest. Given her desire to buy a house at the end of 5 years after closing on the sale of the lot, she decides to choose the payment alternative—$24,000 single amount or the mixed stream of payments in the following table—that provides the higher future value at the end of 5 years. Which alternative will she choose?
Mixed stream Beginning of year Cash flow
1 $2,000
2 $4,000
3 $6,000
4 $8,000
5 $10,000
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