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Harmony Corporation is planning to purchase a degassing tower for removing CO2 from acidified saltwater. The supplier company has proposed to Harmony the following 3
Harmony Corporation is planning to purchase a degassing tower for removing CO2 from acidified saltwater. The supplier company has proposed to Harmony the following 3 payment offers: Offer #1: Pay $800,000 now, or Offer #2: Pay $350,000 now, and $900,000 four years from now, or Offer #3: Pay a single payment two years from now that have the same purchasing power as $900,000 now. As the General Manager of Harmony where your company wants to earn an annual real interest rate of 12%, which offer you should accept if the average inflation rate is expected to be 7% per year. Harmony Corporation is planning to purchase a degassing tower for removing CO2 from acidified saltwater. The supplier company has proposed to Harmony the following 3 payment offers: Offer #1: Pay $800,000 now, or Offer #2: Pay $350,000 now, and $900,000 four years from now, or Offer #3: Pay a single payment two years from now that have the same purchasing power as $900,000 now. As the General Manager of Harmony where your company wants to earn an annual real interest rate of 12%, which offer you should accept if the average inflation rate is expected to be 7% per year
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