Some property for sale and have received two offers

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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?

You should accept the $189,000 today because it has the higher net present value.

You should accept the second offer because you will receive $200,000 total.

You should accept the second offer because you will receive an extra $11,000.

You should accept the second offer because it has a present value of $194,555. 42.

You should accept the $189,000 today because it has the lower future value.

Reference no: EM13980708

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