Question: 6. A building owner gets two offers from a prospective buyer: (a) Rs 5 lakhs payable now. (b) Rs 6,20,000 in five equal instalments, payable

6. A building owner gets two offers from a prospective buyer:

(a) Rs 5 lakhs payable now.

(b) Rs 6,20,000 in five equal instalments, payable at the year-ends, the first of the payments to be made 3 years from now.

If the time value of money is reckoned to be 8%, which of the two offers is more attractive?

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