You Have Some Property for Sale and Have Received Two

question 220

Multiple Choice

You have some property for sale and have received two offers. The first offer is for $189,000 today
in cash. The second offer is the payment of $100,000 today and an additional $100,000 two years
from today. If the applicable discount rate is 8.75%, which offer should you accept and why?

• A) You should accept the $189,000 today because it has the higher present value.
• B) You should accept the $189,000 today because it has the lower future value.
• C) You should accept the second offer because you will receive $200,000 total.
• D) You should accept the second offer because you will receive an extra $11,000.
• E) You should accept the second offer because it has a present value of $194,555.42.

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Definitions:

Pelvic Region

The lower part of the torso, situated between the abdomen and the legs, which encompasses the pelvis.

Joint

A structure in the body where two or more bones meet, allowing for movement and support.

Structure

A composition or arrangement of parts or elements forming a complex or coherent whole.

Bones United

Refers to the process of bone healing or the fusion of bones, often after a fracture.