You are the cfo of a bank which has three options for

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You are the CFO of a bank which has three options for purchasing a piece of land. First, you can pay $200,000 today. Second, you can pay $24,000 today and an additional $24,000 at the end of the next 9 years. Lastly, the bank could pay a lump sum of $325,000 10 years from today. Assuming the bank has a borrowing rate of 5% compounded annually and using only Time Value of Money concepts, which alternative should your bank use? Why?

Reference no: EM13589854

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