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Comparison of Alternatives On January 1, 2014, Chen Yu's Office Supply Store plans to remodel the store and install new display cases. Chen has the
Comparison of Alternatives On January 1, 2014, Chen Yu's Office Supply Store plans to remodel the store and install new display cases. Chen has the following options of payment. Chen's interest rate is 8%. a. Pay $270,000 on January 1, 2014 b. Pay $294,300 on January 1, 2015 c. Pay $334,750 on January 1, 2016 d. Make four annual payments of $82,500 beginning on December 31, 2014. Required Which option should he choose? (Hint: Calculate the present value of each option as of January 1, 2014.)
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