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2. You are selling your house. The Smiths have offered you $200,000. They will pay you immediately. The Joneses have offered you $275,000, but they

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2. You are selling your house. The Smiths have offered you $200,000. They will pay you immediately. The Joneses have offered you $275,000, but they can not pay you until three years from today. The interest rate is 12 percent. Which offer should you choose? (10 POINT) 3. You have the opportunity to make an investment that costs $1,000,000. If you make this investment now, you will receive $250,000 one year from today, $200,000, $150,000 and $ 400,000 two, three and four years from today, respectively. The appropriate discount rate for this investment is 11 percent. .(20 POINT) a. Should you make the investment? b. What is the net present value (NPV) of this opportunity? c. If the discount rate is 10 percent, should you invest? Compute the NPV to support your

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