You have received bids from two manufacturers for purchase of a new dragline. The first

bid (A) is competitive but from a company that requires payment in full on the placement

of order. The second bid (B) is for a higher price, but no payment is required until the

machine starts digging in 3 years. Which is the preferred option? Dragline A bid price

(payment today) is $30,000,000. Dragline B bid price (payment in 3 years' time) is

$40,000,000. The required discount rate is 15%.