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Give typed solution full explanation Don't upload any type of photos A company is changing its payment policy, and therefore has decided to present its

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Don't upload any type of photos

A company is changing its payment policy, and therefore has decided to present its supplier of machinery and production equipment maintenance with these 2 options. Option number 1= offers to pay 1,200,000 in 12 years, and option number 2= offers to pay in 12 years an amount that has the same purchasing power as today's 900,000. If the service provider wants to earn a real interest rate of 5% per year and inflation is 5% per year, which option would you advise the service provider to accept?

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