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What option would Nash prefer

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Reference no: EM133038362

Question - Nelson Company owes money to Nash Company for the purchase of equipment. Nash Company has given Nelson the following payment options:

I. Immediate payment in full of $34,000.

II. Annual payments of $13,000 made at the end of each of the next three years.

III. A single payment of $44,000 made at the end of three years. Assume that both Nelson and Nash use a 10% interest rate compounded annually. What option would Nash prefer, and what is the present value of that option?

-Option II, $32,331.

-Incorrect

-Option III, $33,044.

-Option III, $31,160.

-Option I, $34,000.

-Option I, $31,538.

Reference no: EM133038362

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