Calculating NPV
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Josephine needs to sell her house in a down market and to do this, she is willing to finance the buyer. She found a buyer that suggested multiple offers. Which one should she take to maximize her net present value if her risk free annual percentage interest rate is 6%?
Cash up front monthly payment # of monthly payments Final Balloon payment
A $500,000 $0 0 $0
B $100,000 $3,500 180 $0
C $150,000 $5,000 90 $100,000
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Calculating NPV is achived in the solution.
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Answer:
Given that
Offers Cash up front Monthly payment Number ...
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
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