You want to buy a piece of land for $12,000 cash. The owner would allow you to pay for it in six annual installments of $2300 each, the first one right now. Which method is cheaper for you (paying in cash or in installments) if the time value of money is 12%?

Answer rating: 100% (QA)

To determine which option is cheaper we need to calculate the present value of t... View the full answer