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:

Patient Transfer

The process of moving a patient from one location to another within or between healthcare facilities.

Cerebrovascular Accident

Also known as a stroke, it is a medical condition where there is a sudden death of brain cells due to lack of oxygen, caused by blockage or rupture of an artery to the brain.

Nonverbal

Communication that occurs without the use of words, often involving gestures, facial expressions, and body language.

Right Side

Refers to the side of an object, body, or entity that is to the east when facing north.