Ralston Consulting, Inc., has a $40,000 overdue debt with Supplier No. 1. The company is low...
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Ralston Consulting, Inc., has a $40,000 overdue debt with Supplier No. 1. The company is low an cash, with only $11,200 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways: Option 1: Pay $11,200 now and $38,000 when some large projects are finished, two years from today. Option 2: Pay $56,000 three years from today, when even larger projects are finished. Assuming that the only factor in thesion is the cost of money (12%). (Click here to see present value and future value tables) A. Calculate the present value of each option. Round your present value factor to three decimal places and final answer to the nearest dollar. Present value of Option 1 Present value of Option 2 B. Which option should Ralston choose? Ralston Consulting, Inc., has a $40,000 overdue debt with Supplier No. 1. The company is low an cash, with only $11,200 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways: Option 1: Pay $11,200 now and $38,000 when some large projects are finished, two years from today. Option 2: Pay $56,000 three years from today, when even larger projects are finished. Assuming that the only factor in thesion is the cost of money (12%). (Click here to see present value and future value tables) A. Calculate the present value of each option. Round your present value factor to three decimal places and final answer to the nearest dollar. Present value of Option 1 Present value of Option 2 B. Which option should Ralston choose?
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Fundamentals of Case Management Practice Skills for the Human Services
ISBN: 978-1305094765
5th edition
Authors: Nancy Summers
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