Your company is interested in having a new facility constructed. The contractor expects that it will take approximately 3 years to complete the building. The contractor has offered you three payment plans for the building. They are as follows:

a) The CFO of your company has asked you to provide recommendation concerning which payment plan to accept.
What is your recommendation? Assume your weighted-average cost of capital is 10%.
b) Besides cost, what other factors should you take into consideration when deciding which payment plan toaccept?

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Plan 1 S100,000 Plan 2 Time Today 1 year from 2 years from 3 years from now S1,100,000 S820,000 S1,400,000 Plan 3 S820,000 S500,000 now S1,100,000 $820,000 now $1,100,000 $820,000 ,400,000