Razak has some property for sale and has received two offers. The first offer is...
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Finance
Razak has some property for sale and has received two offers. The first offer is for RM89,500 today in cash. The second offer is the payment of RM35,000 today and an additional guaranteed RM70,000 two years from today. If the applicable discount rate is 11.5 percent, which offer should he accept and why? (assuming no cost involved)
Select one: A. Kumar should accept the first offer today because it has the higher present value B. Kumar should accept the first offer as it is a lump sum payment C. Kumar should accept the second offer because it has the higher present value D. Kumar should accept the second offer today because it has the lower future value
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