EBK CORPORATE FINANCE
4th Edition
ISBN: 9780134202778
Author: DeMarzo
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Textbook Question
Chapter 3, Problem 11P
Your computer manufacturing firm must purchase 10,000 keyboards from a supplier. One supplier demands a payment of$100,000 today plus $10 per keyboard payable in one year. Another supplier will charge $21 per keyboard, also payable in one year. The risk-free interest rate is 6%.
- a. What is the difference in their offers in terms of dollars today? Which offer should your firm take?
- b. Suppose your firm does not want to spend cash today. How can it take the first offer and not spend $100,000 of its own cash today?
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Chapter 3 Solutions
EBK CORPORATE FINANCE
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