Both builders would pay more than this amount for the lot, but this is because they would be paying over a period of time. First, the president is wrong to claim that the loan to Builder B would not involve interest. It is implicit, that is, interest is built into the agreement. The sales manager is also wrong to claim that it doesn't matter which offer is accepted because both involve the receipt of more than the appraised value of the property. One of the two offers is better if we consider the time value of money.
Revenue is recognized at the appropriate time, when a sale takes place, but for the wrong amount.
Please understand my interest in maximizing profits to our shareholders whenever possible. The suggested treatment for this sale, however, is a clear violation of generally accepted accounting principles. Please call me at any time if you would like to discuss this matter further.