You have received two offers on the used car you wish to sell. Mr. Lindberg is offering $8500 cash,.
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You have received two offers on the used car you wish to sell. Mr. Lindberg is offering $8500 cash, and Rosie Senario’s offer is five semiannual payments of $1900, including a payment on the purchase date. Which offer has the greater economic value at a discount rate of 10% compounded semiannually? What is the economic advantage (in current dollars) of the preferred alternative?