Negotiating for the terms of a legal settlement

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1. You are negotiating for the terms of a legal settlement, and your opponent's attorney has presented you with the following alternative settlement offers:

A. $38,000 today in one lump sum.

B. 50,000 to be paid to you in five equal payments of 10,000 at the end of each of the next five years.

C. Five equal annual installments of 9,100 each, beginning today.

What is the present value of each alternative if your discount rate is 10% for each. Which of these alternatives would you choose?

Reference no: EM13785866

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