18. A large telecom service provider has offered to one of its major industrial customer two alternative group GSM service plans P and Q. Plan P has a first cost P5,000,000, service lock-in period 10 years, zero end of service market value and net annual revenue 1,60,000. The corresponding data for plan Q are 9,500,000, 20 years, zero market value and revenue P3,00,000. Using minimum attractive rate of return (M.A.R.R.)of 15% per year before tax, find the future worth of each of the plan and recommend the best plan.
18. A large telecom service provider has offered to one of its major industrial customer two alternative group GSM service plans P and Q. Plan P has a first cost P5,000,000, service lock-in period 10 years, zero end of service market value and net annual revenue 1,60,000. The corresponding data for plan Q are 9,500,000, 20 years, zero market value and revenue P3,00,000. Using minimum attractive rate of return (M.A.R.R.)of 15% per year before tax, find the future worth of each of the plan and recommend the best plan.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![18. A large telecom service provider has offered to one of its major industrial customer two alternative
group GSM service plans P and Q. Plan P has a first cost P5,000,000, service lock-in period 10 years,
zero end of service market value and net annual revenue P 1,60,000. The corresponding data for
plan Q are 9,500,000, 20 years, zero market value and revenue P3,00,000. Using minimum
attractive rate of return (M.A.R.R.)of 15% per year before tax, find the future worth of each of the
plan and recommend the best plan.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb9ea1e58-e2a6-4432-9623-3f574844f3fd%2Ff33c6330-42ac-4796-a28e-856017174b84%2Fw6b76qs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:18. A large telecom service provider has offered to one of its major industrial customer two alternative
group GSM service plans P and Q. Plan P has a first cost P5,000,000, service lock-in period 10 years,
zero end of service market value and net annual revenue P 1,60,000. The corresponding data for
plan Q are 9,500,000, 20 years, zero market value and revenue P3,00,000. Using minimum
attractive rate of return (M.A.R.R.)of 15% per year before tax, find the future worth of each of the
plan and recommend the best plan.
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