You Have Some Property for Sale and Have Received Two

question 107

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 $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 has the greatest value to you.
• 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:

Precautionary Principle

A strategy to cope with possible risks where scientific understanding is yet incomplete, prioritizing the prevention of harm when making decisions.

Regulatory Scheme

A system of regulations established by governments or regulatory bodies to control or govern specific activities, industries, or behaviors.

ISO 14001

An international standard that outlines the requirements for an effective environmental management system (EMS).

American National Standards Institute

An organization that oversees the creation, promulgation, and use of thousands of norms and guidelines that directly impact businesses in nearly every sector.