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Misty has the option to buy two different annuities. The first starts in five years...

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Finance

Misty has the option to buy two different annuities. The first starts in five years and pays $5,000 per year for three years. The second begins in 10 years and pays $3,000 per year for five years. Currently, Misty is very risk-averse and thus her current required return is 5.7%. In nine years, she expects to be more financially secure and her cost of capital will increase to 6.2% from then on. If each annuity costs $5,000 today, which annuity (or annuities), if any, should Misty purchase? How much value will she realize from the purchase(s), if she makes any purchases?
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Misty has the option to buy two different annuities. The first starts in five years and pays $5,000 per year for three years. The second begins in 10 years and pays $3,000 per year for five years. Currently. Misty is very risk-averse and thus her current required retum is 5.7\%. In rine years, she expects to be more financially secure and her cost of capital will increase to 6.2% from then on. If each annuity eosts $5,000 today, which annuity (or annuities), if any, should Misty purchase? How much value will she realize from the purchase(s). if she makes any purchases

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