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Angus McScrooge comes to you for financial advice. He is considering adding a downtown parking lot to his holdings. The owner of the property has
Angus McScrooge comes to you for financial advice. He is considering adding a downtown parking lot to his holdings. The owner of the property has given McScrooge four different payment options. Which of the following options would you recommend, and why? Remember that you are advising the buyer here.
McScrooge tells you he can earn annual interest, compounded monthly on his money. You have no reason to question his assumption. For each option, determine the present value of all relevant cash flows for points each and then provide your final answer for points total of points for this problem
a Option Pay $ today.
b Option Pay a lump sum of $ at the end of two years.
c Option Pay $ at the end of each month for two years.
d Option Pay $ immediately plus $ in a lump sum two years from now.
e Which option do you recommend, and why?
Please show me how to solve using a financial calculator and not equations Thanks!!
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