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What option would Nash prefer

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Reference no: EM132938130

Question - Nelson Company owes money to Nash Company for the purchase of equipment. Nash Company has given Nelson the following payment options:

-I. Immediate payment in full of $37,000.

-II. Annual payments of $14,000 made at the end of each of the next three years.

-III. A single payment of $47,000 made at the end of three years. Assume that both Nelson and Nash use a 8% interest rate compounded annually. What option would Nash prefer, and what is the present value of that option?

Reference no: EM132938130

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