You Have Some Property for Sale and Have Received Two

question 104

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 net 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:

Eavesdropping

In animal behavior, the act of intercepting and using signals or communication between other individuals to one's own advantage.

Tail Length

The measured distance from the base to the tip of an animal's tail, often relevant in studies of animal behavior or morphology.

Honest Signals

Communicative actions or displays that convey accurate information about an organism's capabilities, intentions, or genetic quality to others.

Redundant Signals

Multiple signals or messages that convey the same information, potentially increasing the reliability of communication.