Professor moneybags has a chance to purchase one of two


Professor Moneybags has a chance to purchase one of two professional rugby clubs, the Seattle Serpents or the Trenton Triceratops. At the beginning of last year, the Serpents were purchased for $80 million, provided $8 million in yearly profits, and are currently on sale for $120 million. On the other hand, the Triceratops started the year purchased at $40 million, provided $6.5 million in yearly profits, and are currently on sale for $110 million. Which team would you suggest that Professor Moneybags purchase today, assuming a 6% interest rate? (Assume he cannot depreciate the payroll of the team.)

 

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Financial Management: Professor moneybags has a chance to purchase one of two
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