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What is the rate of return on buying outright

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Question - Your company is looking to invest in some adjacent land to your current facility. You have two options, you can purchase the land outright now for $834,962. Or, you could put pay the balance off in 5 equal annual payments of $200,193. The payment schedule can be seen in the table below. What is the rate of return on buying outright?

Year

Single Payment

Annual Payments

0

-$821,362

-$200,193

1

0

-$200,193

2

0

-$200,193

3

0

-$200,193

4

0

-$200,193

Reference no: EM133176208

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