Question
A manufacturing firm purchased a heavy duty drilling machine. They were given two payment options: Option 1 : Make a payment of $34,500 immediately to
A manufacturing firm purchased a heavy duty drilling machine. They were given two payment options:
Option 1: Make a payment of $34,500 immediately to settle the invoice for the machine.
Option 2: Make a payment of $24,000 immediately and the balance of $23,550 in 3 months to settle the invoice.
If money is worth 4.12% compounded quarterly,
What is the total present value of Option 2?
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Lessons In Corporate Finance
Authors: Paul Asquith, Lawrence A. Weiss
2nd Edition
1119537835, 978-1119537830
