Question
Carey Company owns a plot of land on which burried toxic wastes have been discovered. Since it will require several years and a considerable sum
Carey Company owns a plot of land on which burried toxic wastes have been discovered. Since it will require several years and a considerable sum of money before the property is fully detoxified and capable of generating revenues, Carey wishes to sell the land now. It has located two potenital buyers. Buyer A, who is willing to pay $850,000 for the land now, or Buyer B, who is willing to make 20 annual payments of $90,000, with the first payment to be made at the end of the year. Assuming that the appropraite rate of interest is 9%, wo whom should Carey sell the land. Show calculations.
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