Appropriate rate of interest

Reference no: EM13145522

Betta Company owns a plot of land on which buried toxic wastes have been discovered. Since it will require several years and a considerable sum of money before the property is fully detoxified and capable of generating revenues, Betta wishes to sell the land now. It has located two potential buyers: Buyer A, who is willing to pay $385,000 for the land now, and Buyer B, who is willing to make 10 annual payments of $60,000 each beginning at the end of the year. Assuming that the appropriate rate of interest is 9%, to whom should Betta sell the land? Show calculations.

Reference no: EM13145522

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