Lights, Camera, and More sells filmmaking equipment. George is considering buying equipment from Lights, Camera, and More
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Lights, Camera, and More sells filmmaking equipment. George is considering buying equipment from Lights, Camera, and More for $150,000 and has the following payment options: (1) pay $150,000 today, (2) pay $75,000 today and issue a non-interest bearing note promising to pay $82,500 in one year, or (3) pay nothing down and issue a non-interest bearing note promising to pay $172,500 in one year. Assuming an annual discount rate of 11%, calculate which option’s cost has the lowest present value.
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