A company wants to buy a warehouse for 24 months. you have the option to choose between: 

a) $1000 per month paid at the end of the month and 

b) $0 per month for the first 4 months and for the remaining months 1,150$ paid at the end of which month. 

The annual cost of capital for the company is 12%, so which one will we choose based on the present value criterion?

Answer rating: 100% (QA)

To determine which option to choose based on the present value criterion we can ca... View the full answer