Assuming no differential tax treatment between the two, Ask an Expert

Finance

Ruth Nail has just received two offers for her seaside home. The first offer is for $1 million today. The second offer is for an owner-financed sale with a payment schedule as follows:

End of Year Payment

0 (Today) $200,000

1 200,000

2 200,000

3 200,000

4 200,000

5 300,000

Assuming no differential tax treatment between the two options and that Ruth earns a rate of 8 percent on her investments, which offer should she take?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M953055

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