Your Green Investment Tips Subscription Is About to Expire

question 19

Multiple Choice

Your Green Investment Tips subscription 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:

Cash Flows

The total amount of money being transferred into and out of a business, providing insights into its operational efficiency and financial health.

Consolidated Net Income

The total amount of net income earned by a parent company and its subsidiaries, presented as a single figure after eliminating inter-company transactions.

Bonds Payable

Long-term debts issued by corporations or governmental units, represented by formal certificates obligating the issuer to pay interest and repay principal at a specified maturity date.

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit, typically shown as an expense on the income statement.