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Ahmad has contracted to sell a piece of land that he owns, which has permission for a residential development. A property developers is willing to

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Ahmad has contracted to sell a piece of land that he owns, which has permission for a residential development. A property developers is willing to buy the land and has proposed two methods of payments. The developer is willing to pay $ 200,00 now or a deferred payment over the next 4 years paying $ 30,000 at the end of year 1, $ 40,000 at end of year 2, $ 45,000 at the end of year 3, and $ 60,000 at the end year 4. Ahmad wants to use the proceeds at the ends of year 5 to start a business and is concerned about future value of his receipts at the end of year 5. He earns 5% annual interest from his investment account. Vhich alternative should Ahmad choose ? (7 marks)

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