Would ellina prefer to pay the friend today or in four years

Reference no: EM13905598

1. Assume Rafael can earn an 8 percent after-tax rate of return. Would he prefer $1,000 today or $1,500 in five years?

2. Assume Ellina earns a 10 percent after-tax rate of return, and that she owes a friend $1,200. Would she prefer to pay the friend $1,200 today or $1,750 in four years?

Reference no: EM13905598

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