Answer to Question #256014 in Economics for Kors

Question

. As a rental for a building, the owner received two offers:

(A) P50000 a year for 8 years, the rental for each year paid at the start of the year

(B) P30000 the first year, P40000 the second year, P50000 the third year, and P60000 for

the next 5 years with all rentals paid at the beginning of each year.

Answer 1

The income in the first case will be 50 000 x 8 = 400 000

The income in the second case will be 30 000 + 40 000 + 50 000 + (60 000 x 5) = 420 000.

So that the second offer is more beneficial.