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

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## Question:

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?

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