5. The following two alternatives are mutually exclusive. (a) Use rate of return analysis to decide which one will you select if your MARR is 14% per year? (b) Graph interest rate vs. present value for both option 1 and 2. (c) Discuss how your selection between option 1 and 2 will change when MARR is changed and at which interest rate the two options are the same economically. Alternative Life, Annual Benefit Salvage Value Initial Cost years 4. Option 1 Option 2 $42,000 $45,000 $10,000 $11,500 $4,000 $4,200 6.
5. The following two alternatives are mutually exclusive. (a) Use rate of return analysis to decide which one will you select if your MARR is 14% per year? (b) Graph interest rate vs. present value for both option 1 and 2. (c) Discuss how your selection between option 1 and 2 will change when MARR is changed and at which interest rate the two options are the same economically. Alternative Life, Annual Benefit Salvage Value Initial Cost years 4. Option 1 Option 2 $42,000 $45,000 $10,000 $11,500 $4,000 $4,200 6.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:DONE IN EXCEL
especify how to donthe graph step by step
okease
5.
(a) Use rate of return analysis to decide which one will you select if your MARR is 14%
per year?
(b) Graph interest rate vs. present value for both option 1 and 2.
(c) Discuss how your selection between option 1 and 2 will change when MARR is
changed and at which interest rate the two options are the same economically.
The following two alternatives are mutually exclusive.
Annual
Benefit
Salvage
Value
Alternative
Initial
Life,
Cost
years
4.
Option 1
Option 2
$42,000
$45,000
$10,000
$11,500
$4,000
$4,200
6.
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