Rate of return and discount rate

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Reference no: EM131308107

Your finance professor Dr. Anderson makes you the following offer: He will give you $3,000 at the end of each year for the next SIX years if you agree to pay him back $2,500 at the end of each of the following ten years. Should you accept this offer if your opportunity cost of funds is 10%, compounding annually (also known as rate of return, discount rate)?

a. Should accept the offer

b. Should not accept the offer

c. It does not matter whether or not to accept the offer

d. There is not enough information to answer the question

Reference no: EM131308107

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