Question

Ruth Nail receives two offers for her seaside home. The first offer is for $1 million today. The second offer is for an owner-financed sale with annual payments as follows:
End of Year Payment
0 (Today)............ $200,000
1.............. 200,000
2.............. 200,000
3.............. 200,000
4.............. 200,000
5.............. 300,000
Assuming that Ruth earns a rate of 8 % on her investments, which offer should she take?


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  • CreatedMarch 26, 2015
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