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A Delivery Service Is Buying 600 Tyres for Its Fleet

question 10

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A delivery service is buying 600 tyres for its fleet of vehicles. One supplier offers to supply the tyres for $85 per tyre, payable in one year. Another supplier will supply the tyres for $20 000 down today, then $50 per tyre, payable in one year. What is the difference in PV between the first and the second offer, assuming interest rates are 8.5%?


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