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Accounting, Finance, SPSS
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English (U.S.)
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Topic:
Which is a Better Option, Annuity or Lump Sum?
Coursework Instructions:
A friend of yours has just received an inheritance from their rich Uncle Buck. They know you are taking accounting and asked you if you could tell them what an “annuity” is? They said the lawyer told them they could receive it as a lump sum today or as an “annuity” over the next 10 years – they asked, “Which one would you choose?”.
answers the following:
Select the option you would prefer.
Using the concepts you learned in this chapter what other information would you advise your friend to consider?
Coursework Sample Content Preview:
Annuity.
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An annuity is a series of identical bills made at fixed periods over a exact duration. Choosing among a lump sum fee and an annuity relies upon on an character's economic desires and danger tolerance. If the recipient prefers a consistent profits circulate and wants to keep away from the danger of overspending or mismanaging the inheritance, the annuity may be a better alternative. However, in the event that they produce other funding opportunities and sense relaxed dealing with their cash, they'll decide on the lump sum price.
Other than this choice, different factors to don't forget encompass taxes, inflation, and investment alternatives. For instance, if the recipient chooses the lump sum payment, they may want to pay a better tax rate, whereas an annuity fee can be taxed at a decrease rate. Moreover, inflation can reduce the shopping electricity of annuity payments over time, making the lump sum charge more attractive.
Another crucial attention is investment options. If the recipient is assured in their ...
Student's Name
Institutional Affiliation
Course Code and Title
Instructor's Details
Assignment Due Date
An annuity is a series of identical bills made at fixed periods over a exact duration. Choosing among a lump sum fee and an annuity relies upon on an character's economic desires and danger tolerance. If the recipient prefers a consistent profits circulate and wants to keep away from the danger of overspending or mismanaging the inheritance, the annuity may be a better alternative. However, in the event that they produce other funding opportunities and sense relaxed dealing with their cash, they'll decide on the lump sum price.
Other than this choice, different factors to don't forget encompass taxes, inflation, and investment alternatives. For instance, if the recipient chooses the lump sum payment, they may want to pay a better tax rate, whereas an annuity fee can be taxed at a decrease rate. Moreover, inflation can reduce the shopping electricity of annuity payments over time, making the lump sum charge more attractive.
Another crucial attention is investment options. If the recipient is assured in their ...
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