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P3-12. Ruth Nail has just received two offers for her seaside home. The first offer is for $1 million today. The second offer is for an...

P3-12. Ruth Nail has just received two offers for her seaside home. The first offer is for $1 million today. The second offer is for an owner-financed sale with a payment schedule as follows:
                          End of Year                  Payment
                             0 (Today)                 $200,000
                             1                               200,000
                             2                               200,000
                             3                               200,000
                             4                               200,000
                             5                               300,000
Assuming no differential tax treatment between the two options and that Ruth earns a rate of 8 percent on her investments, which offer should she take?

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