You Have Some Property for Sale and Have Received Two

question 33

Multiple Choice

You have some property for sale and have received two offers. The first offer is for $89,500 today in cash. The second offer is the payment of $35,000 today and an additional guaranteed $70,000 two years from today. If the applicable discount rate is 11.5 percent, which offer should you accept and why? 

• A) You should accept the $89,500 today because it has the higher net present value. 
• B) You should accept the $89,500 today because it has the lower future value. 
• C) You should accept the first offer as it is a lump sum payment. 
• D) You should accept the second offer because it has the larger net present value. 
• E) It does not matter which offer you accept as they are equally valuable. 

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Definitions:

App

Short for application, referring to a software program designed to perform specific tasks on computing devices.

Quick Reference Bar

A toolbar that provides easy access to frequently used commands and tools within a software application.

App Bar

A graphical control element typically found at the top of an app, containing buttons and icons for frequently used functions.

Outlook Bar

A feature in Microsoft Outlook that allows users to quickly navigate between different sections like mail, calendar, and tasks.