You have some property for sale and have received two offers.The first offer is for $189,000 today in cash.The second offer is the payment of $100,000 today and an additional $100,000 two years from today.If the applicable discount rate is 8.75 percent,which offer should you accept and why?
A) You should accept the $189,000 today because it has the higher net present value.
B) You should accept the $189,000 today because it has the lower future value.
C) You should accept the second offer because you will receive $200,000 total.
D) You should accept the second offer because you will receive an extra $11,000.
E) You should accept the second offer because it has a present value of $194,555.42.
Correct Answer:
Verified
Q61: One year ago,the Jenkins Family Fun Center
Q70: What is the future value of the
Q71: What is the future value of the
Q72: You are considering a project with the
Q73: Brinker,Inc.has been investing $156,000 a year for
Q74: You are considering a project with the
Q77: The government has imposed a fine on
Q78: Today,you turn 21.Your birthday wish is that
Q79: Your local travel agent is advertising an
Q80: The Bluebird Company has a $12,000 liability
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents