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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. 1. What is the value of Offer A? 2. What is the value of Offer B? 3. What is the value of Offer C? 4. Which offer should Olfert accept? 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. 1. What is the value of Offer A? 2. What is the value of Offer B? 3. What is the value of Offer C? 4. Which offer should Olfert accept
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