You get the following offer from a friend: He will give you $2,000 at the end of

Question:

You get the following offer from a friend: He will give you $2,000 at the end of each year for the next six years if you agree to pay him back $2,000 at the end of each of the following nine years. Should you accept this offer if your opportunity cost of funds is 10%? Why?

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...