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In: Economics

Triple J Construction Firm had put up for sale of some of their heavy equipments for...

Triple J Construction Firm had put up for sale of some of their heavy equipments for construction works. There were two interested buyers submitting their respective bids for the heavy equipments. The bids are as follows: Buyer A offers P10,000,000 payable 20% downpayment, the balance payable P1,000,000 annually for 8 years. Buyer B offers P9,000,000 payable P2,000,000 down payment, the balance payable P500,000 semi-annually for 7 years. How much is the difference between the two bids if money is worth 10% effective?

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Expert Solution

There are two interested buyers ready for buying heavy equipments for construction works and they submitted their bids also.

Buyer A offered P10,000,000 payable 20% downpayment, the balance payable P1,000,000 annually for eight years.

Buyer B offered P9,000,000 payable P2,000,000 down payment, the balance payable P500,000 semi-annually for seven years.

Then the difference between t the two bids if money is worth 10% effective is P347,733.29


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