basil is selling a business. She has 2 offers to consider. Current simple interest rates are 8%.

Offer 1: $1,250,000 payable today and $525,000 payable in 1 year

Offer 2: $1,500,000 payable today and $500,000 payable in 3 years.

a) What is the current economic value of both offers? Round your answer to the nearest dollar (2 points)

Offer 1:

Offer 2:

b) Which offer Should Sam choose? (1 point)

c) What is the economic advantage of that offer? (1 point)