Solution-What will be your periodic cash receipt

What will be your periodic cash receipt

Reference no: EM13878104

Cash Receipts Frequency and Present-Value Consequences Assume that you are about to sell property (a vacant parcel of real estate) you own but otherwise have no use for. The net-of-sales- commission selling price for the property is $500,000. You are willing to finance this transaction over a 20-year period and have told the buyer that you expect a 12 percent pretax return on the trans- action. The buyer has asked you for a payment schedule under several alternatives.

Required

1. What will be your periodic cash receipt, to earn a 12 percent return, if payments are received from the purchaser:

a. at the end of each week.

b. at the end of each month.

c. at the end of each quarter.

d. at the end of each year.

2. What general conclusion can you draw based on the calculations above in (1)?

Reference no: EM13878104

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What will be your periodic cash receipt

Reference no: EM13878104

Reference no: EM13878104

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