|A firm sells the same material with two separate payment plans. 1. According to the 1st payment plan, the payment period is 12 months, each monthly payment is 10 837 000 $, and an interim payment of 12 million $ is required at the end of the 6th month. 2. In the 2nd payment plan, the payment period is 18 months, each monthly payment is 7 965 000 $ and an interim payment of 36 million $ is required at the end of the 12th month. Annual nominal interest rate for both options is 60%. Which payment plan would you recommend? In payments, discrete compound interest is applied

|A firm sells the same material with two separate payment plans. 1. According to the 1st payment plan, the payment period is 12 months, each monthly payment is 10 837 000 $, and an interim payment of 12 million $ is required at the end of the 6th month. 2. In the 2nd payment plan, the payment period is 18 months, each monthly payment is 7 965 000 $ and an interim payment of 36 million $ is required at the end of the 12th month. Annual nominal interest rate for both options is 60%. Which payment plan would you recommend? In payments, discrete compound interest is applied

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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