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You Sign a Contract to Pay $1000 Next Year for the Refrigerator

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Essay

You sign a contract to pay $1000 next year for the refrigerator you bought today.The rate of inflation is 10% and the real interest rate is 7%.Alternatively,you could pay $875 today.What should you do to save the most money?


Definitions:

Functional Departmentalization

The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources.

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