# A shopper is considering the purchase of an appliance. Store 1 offers the appliance for $3,200 with

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## Question:

A shopper is considering the purchase of an appliance. Store 1 offers the appliance for $3,200 with payment due today. Store 2 offers the appliance for $3,400 due in one year.

Required:

1-a. Assuming an annual discount rate of 9%, calculate the present value.

1-b. From which store should the shopper buy the appliance and why?

**Related Book For**

## Financial Accounting and Reporting a Global Perspective

ISBN: 978-1408076866

4th edition

Authors: Michel Lebas, Herve Stolowy, Yuan Ding