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A contractor completed a project and is due a payment of $150,000 today. His client is running into financial difficulties. As a solution, the client offered to pay him $180,000 single payment three years from today. The contractor has to borrow $150,000 in funds to pay his subcontractors today. The bank agreed to lend him money at an interest rate of 8% and make payments in three years from today. Is the contractor's client making a financially acceptable offer? Why? Demonstrate your calculations.

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Financial Management, Finance

Category:- Financial Management
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