Farmer Jones bought his farm for $75,000 in 1975. Today the farm is worth $500,000, and the interest rate is 10 percent

ABC Corporation has offered to buy the farm today for $500,000 and XYZ Corporation has offered to buy the farm for $530,000 one year from now. Farmer Jones could earn net profit of $15,000 (over and above all of his expenses) if he farms the land this year. What should he do? A) Sell to ABC Corporation.
B) Farm the land for another year and sell to XYZ Corporation.
C) Accept either offer as they are equivalent.
D) Reject both offers.


A

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