An Obligation Can Be Settled by Making a Payment of $7500.00

question 9

Essay

An obligation can be settled by making a payment of $7500.00 now and a final payment of $10 000.00 in five years. Alternatively the obligation can be settled by payments of $750.00 at the end of every three months for five years. If interest rate is 10% compounded quarterly, determine the preferred alternative.

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Definitions:

Business Ethics

Principles and standards that determine acceptable conduct in business.

Business Organizations

Entities set up to carry out commercial enterprises, including corporations, partnerships, and sole proprietorships.