
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Fairfax Cookie just bought 2 tons of chocolate chips from Chantilly Chocolate. Fairfax Cookie has been offered the 3 possible payment options described in the
table. If the discount rate is 9.94%, which of the assertions is true?
Terms of payment (amount and timing)
Option from Fairfax Cookie to Chantilly Chocolate
$9,450.00 today
A
B
C
$12,500.00 in 3 years
$14,900.00 in 3 years
O Fairfax Cookie should prefer option B more than option A, and Fairfax Cookie should prefer option A more than option C
O Fairfax Cookie should prefer option B more than option A and Fairfax Cookie should prefer option C more than option A
O Fairfax Cookie should prefer option A more than option B and Fairfax Cookie should prefer option C more than option A
O Fairfax Cookie should prefer option A more than option B, and Fairfax Cookie should prefer option A more than option C
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