Problem 3: A certain manufacturing plant is being sold and was submitted for bidding. Two _bids were submitted by interested buyers. The first bid offered to pay P 200,000 each year for 5 years, each payment being made at the beginning of each year. The second bid offered to pay P 120,800 the first year, P 180,000 the second year, and P 270,000 each year for the next 3 years, all payments being made at the beginning of each year. If money is worth 12% compounded annually, which bid should the owner of the plant аcсep!?
Problem 3: A certain manufacturing plant is being sold and was submitted for bidding. Two _bids were submitted by interested buyers. The first bid offered to pay P 200,000 each year for 5 years, each payment being made at the beginning of each year. The second bid offered to pay P 120,800 the first year, P 180,000 the second year, and P 270,000 each year for the next 3 years, all payments being made at the beginning of each year. If money is worth 12% compounded annually, which bid should the owner of the plant аcсep!?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Problem 3: A certain manufacturing plant is being sold and was submitted
for bidding. Two bids were submitted by interested buyers. The first bid
offered to pay P 200,000 each year for 5 years, each payment being made
at the beginning of each year. The second bid offered to pay P 120,000 the
first year, P 18Ố,000 the second year, and P 270,000 each year for the next
3 years, all payments being made at the beginning of each year. If money is
worth 12% compounded annually, which bid should the owner of the plant
аcсept?
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