6) A manufacturing firm may decide to buy an adjacent property so that it can expand its warehouse. If financed through the seller, the property's price is $280,000, with 15% down and the balance due in five annual payments at 10%. The seller will accept 8% less if cash is paid. The firm does not have $240,000 in cash, but it can borrow this amount from a bank. What is the rate of return or IRR for the loan offered by the seller?

Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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6) A manufacturing firm may decide to buy an adjacent property so that it can expand its warehouse. If financed
through the seller, the property's price is $280,000, with 15% down and the balance due in five annual payments at
10%. The seller will accept 8% less if cash is paid. The firm does not have $240,000 in cash, but it can borrow this
amount from a bank. What is the rate of return or IRR for the loan offered by the seller?
Transcribed Image Text:6) A manufacturing firm may decide to buy an adjacent property so that it can expand its warehouse. If financed through the seller, the property's price is $280,000, with 15% down and the balance due in five annual payments at 10%. The seller will accept 8% less if cash is paid. The firm does not have $240,000 in cash, but it can borrow this amount from a bank. What is the rate of return or IRR for the loan offered by the seller?
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