15. You have some property for sale and have received two offers. The first offer is for $189,000today in cash. The second offer is the payment of $100,000 today and an additional $100,000two years from today. If the applicable discount rate is 8.75%, which offer should you acceptand why?●●Notes:Interest rates are given as annual rates. If the payments are monthly, then the annual interestrate needs to be divided by 12 in order to get the rate per month. Use monthly rates in yourcalculations when the payments are monthly. Similarly, if the payments are monthly, then N isthe number of months (not the number of years).Unless stated otherwise, assume that annuity payments occur at the end of the period (ordinaryannuity)Upload an Excel, Word, or PDF file showing the answer and the supporting calculations. Clearlyshow your work with all steps included. If you are using mathematical formulas, write theformulas with all steps to get to the answer. If you are using a financial calculator, write out allthe calculator keystrokes used. If you are using Excel, submit the file with formulas and the dataentered into the formula. Your work must be clearly visible. (Digging through your assignments

Solution:- When an amount is receivable in future and there are various alternatives available, that…

15. 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?

15. 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?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2.6 million purchase price. The monthly payment on this loan will be $14,200. a. What is the APR on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the EAR on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Annual percentage rate % b. Effective annual rate %
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