19th Edition

ISBN: 9781947172609

Author: OpenStax

Publisher: OpenStax College

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Chapter 11, Problem 4PA

Ralston Consulting. Inc., has a $25,000 overdue debt with Supplier No. 1. The company is low on cash, with only $7,000 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways:

Option 1: Pay 57,000 now and $23,750 when some large projects are finished, two years from today.

Option 2: Pay $35,000 three years from today, when even larger projects are finished.

Assuming that the only factor in the decision is the cost of money (8%). which option should Ralston choose?

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Chapter 11, Problem 3PA

Chapter 11, Problem 5PA

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