An owner of a small company is deciding to sell her business. She received several options specified bellow. Which one should the company's owner accept?
A) $600 000 in cash
B) $500 000 in government bonds earning a 5% rate of return over 10 years
C) $400 000 in securities earning an 8% rate of return over 8 years
D) 15% of the future profits earned by the next owner during first 10 years
E) It is impossible to compare these offers due to uncertainty about basic economic variables over time.
Correct Answer:
Verified
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