Money in the hand today is worth more than money that will come in tomorrow. Obviously money has a time value.
However questions are never asked like this…
For example a friend has a small cozy flat in one of the suburbs of Mumbai. He paid Rs. 77,000 for it in the year 1976 – The Emergency ensured that he got a flat at that price. A few years later he bought the neighboring flat for Rs. 94,000.
Now he has a decision to take. A builder is offering him Rs. 5 crores for both the flats. He is sure that he should take it.
However the builder wants all the 24 flats in both the wings of the building….and that is beyond my clients call.
Another friend is offering him Rs. 4 crores for the whole deal – immaterial of whether all the flats are sold or not sold.
What should he do? Should he do for the first builder to make good the offer of Rs. 5 crores or should he take the Rs. 4 crores and scoot?
I have given him the solution….readers views welcome….lets have some fun. In case you need to ask questions, I promise to answer them. The figures are a little tweaked.
And for solutions, i do not charge any fees….L O L
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