Your Subscription to Investing Wisely Weekly Is About to Expire

question 60

Multiple Choice

Your subscription to Investing Wisely Weekly is about to expire.You plan to subscribe to the magazine for the rest of your life,and you can renew it by paying $85 annually,beginning immediately,or you can get a lifetime subscription for $850,also payable immediately.Assuming that you can earn 6.0% on your funds and that the annual renewal rate will remain constant,how many years must you live to make the lifetime subscription the better buy?

• A)7.48
• B)8.80
• C)10.35
• D)12.18
• E)14.33

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Definitions:

MACRS

Modified Accelerated Cost Recovery System; a method of depreciation for tax purposes in the United States.

Depreciated

A decrease in the value of an asset over time due to wear and tear, obsolescence, or market conditions, often used for tax purposes.

Cash Inflow

The total amount of money being transferred into a business, from operations, financing or investing activities, over a specific period of time.

Cash Flows

The cumulative sum of funds moving into and exiting a company, notably influencing its liquidity.