You Have Some Property for Sale and Have Received Two

question 326

Multiple Choice

You have some property for sale and have received two offers. The first offer is for $98,000 in cash today. The second offer is the payment of $50,000 today and an additional $60,000 two years from today. The applicable discount rate is 11%. You should accept the _____ offer as it is worth _____ more today.

• A) first; $412.85
• B) first; $587.49
• C) second; $349.16
• D) second; $491.80
• E) second; $697.35

---

Definitions:

Tariff

A tax or duty to be paid on a particular class of imports or exports, used by governments to regulate trade.

Normal Trade Relations

A GATT principle of trade law which requires that WTO member states treat like goods coming from other member states on an equal basis.

GATT

General Agreement on Tariffs and Trade, a multilateral treaty aimed at reducing global barriers to trade and promoting international commerce.

WTO

The World Trade Organization, an international body that deals with the rules of trade between nations.