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Olfert has received three offers to purchase his used combine. Farmer A has offered him $99,000 today and $110,000 two years from now. Farmer B
Olfert has received three offers to purchase his used combine. Farmer A has offered him $99,000 today and $110,000 two years from now. Farmer B has offered him $60,000 today and $38,500 every six months for two years. Farmer C has offered him three annual payments of $69,500 starting today. Interest rates are 7.5% compounded annually.
What is the value of Offer A?
What is the value of Offer B?
What is the value of Offer C?
Which offer should Olfert accept?
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