The Image P2.2 has the pricing structure for the Ohio datacenter for Linux "a1.4xlarge" server for Standard 3-Year Term. Assume that the monthly payments are done at the end of the month. Compute the monthly payments' present value and suggest whether the firm should opt for No Upfront or All upfront payment option. Hint: If the monthly payment's present value is more than the upfront payment, you should prefer the upfront payment option. Firm's annualised required rate of return is 10% pa. (i) Write formula in cell C19 to compute the monthly required rate of return. (ii) Enter the values of number of periods, Monthly payments and Type in cells C20, C21 and C23 respectively. (iii) Write a formula in cell C25 to compute the present value of the monthly paments. (iv) In cell C26, select your recommended payment option from the dropdown.
5 (b) The Image P2.2 has the pricing structure for the Ohio datacenter for Linux "a1.4xlarge" server for Standard 3-Year Term.
Assume that the monthly payments are done at the end of the month.
Compute the monthly payments' present value and suggest whether the firm should opt for No Upfront or All upfront payment option.
Hint: If the monthly payment's present value is more than the upfront payment, you should prefer the upfront payment option.
Firm's annualised required rate of return is 10% pa.
(i) Write formula in cell C19 to compute the monthly required rate of return.
(ii) Enter the values of number of periods, Monthly payments and Type in cells C20, C21 and C23 respectively.
(iii) Write a formula in cell C25 to compute the present value of the monthly paments.
(iv) In cell C26, select your recommended payment option from the dropdown.
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