Question
2. You want to sell your three-year-old car privately to an individual, and have placed an ad in the classified section of the newspaper. You
| 2. You want to sell your three-year-old car privately to an individual, and have placed an ad in the classified section of the newspaper. You are asking $15,000, but a potential customer has offered you $22,000 (guaranteed by a bank), payable to you four years from now. If you believe a fair interest rate on a personal loan is 7%, determine which is more advantageous to you, $15,000 today or the present value of $22,000 guaranteed four years from now?
MUST USE EXCEL FORMULAS. SHOW YOUR WORK. |
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
14th edition
1337090581, 978-1337090582
