You are considering two investment options. In option A, you have to invest $6,000 now and $1,200 three years from now. In option B. you have to invest $3,200 now, $1,800 a year from now, and $1,100 three years from now. In both options, you will receive four annual payments of $2,400 each. (You will get the first payment a year from now.) Which of these options would you choose based on (a) the conventional payback criterion, and (b) the present worth criterion, assuming 10% interest? Assume that all cash flows occur at the end of a year. Click the icon to view the interest factors for discrete compounding when ; = 10% per year. - X More Info Equal Payment Series Single Payment Compound Amount Compound Amount Factor Sinking Fund Factor Present Worth Factor Factor (F/P, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) 1.1000 1.0000 1.0000 0.9091 1.2100 2.1000 0.4762 1.7355 1.3310 3.3100 0.3021 2.4889 1.4641 4.6410 0.2155 3.1699 1.6105 6.1051 0.1638 3.7908 1.7716 7.7156 0.1296 4.3553 1.9487 9.4872 0.1054 4.8684 2.1436 11.4359 0.0874 5.3349 2.3579 13.5795 0.0736 5.7590 2.5937 15.9374 0.0627 6.1446 N12345 6 7 8 9 10 Present Worth Factor (P/F, i, N) 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4685 0.4241 0.3855 Capital Recovery Factor (A/P, i, N) 1.1000 0.5782 0.4021 0.3155 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627
You are considering two investment options. In option A, you have to invest $6,000 now and $1,200 three years from now. In option B. you have to invest $3,200 now, $1,800 a year from now, and $1,100 three years from now. In both options, you will receive four annual payments of $2,400 each. (You will get the first payment a year from now.) Which of these options would you choose based on (a) the conventional payback criterion, and (b) the present worth criterion, assuming 10% interest? Assume that all cash flows occur at the end of a year. Click the icon to view the interest factors for discrete compounding when ; = 10% per year. - X More Info Equal Payment Series Single Payment Compound Amount Compound Amount Factor Sinking Fund Factor Present Worth Factor Factor (F/P, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) 1.1000 1.0000 1.0000 0.9091 1.2100 2.1000 0.4762 1.7355 1.3310 3.3100 0.3021 2.4889 1.4641 4.6410 0.2155 3.1699 1.6105 6.1051 0.1638 3.7908 1.7716 7.7156 0.1296 4.3553 1.9487 9.4872 0.1054 4.8684 2.1436 11.4359 0.0874 5.3349 2.3579 13.5795 0.0736 5.7590 2.5937 15.9374 0.0627 6.1446 N12345 6 7 8 9 10 Present Worth Factor (P/F, i, N) 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4685 0.4241 0.3855 Capital Recovery Factor (A/P, i, N) 1.1000 0.5782 0.4021 0.3155 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
Transcribed Image Text:You are considering two investment options. In option A, you have to invest $6,000 now and $1,200 three years from now. In option B. you have to invest $3,200 now, $1,800 a year from now, and $1,100 three years from
now. In both options, you will receive four annual payments of $2,400 each. (You will get the first payment a year from now.) Which of these options would you choose based on (a) the conventional payback criterion, and
(b) the present worth criterion, assuming 10% interest? Assume that all cash flows occur at the end of a year.
Click the icon to view the interest factors for discrete compounding when /= 10% per year.
- X
More Info
Single Payment
Equal Payment Series
Sinking Present
Fund
Worth
Compound
Amount
Factor
(F/A, i, N)
Factor
Factor
(A/F, i, N)
(P/A, i, N)
1.0000
1.0000
0.9091
2.1000
0.4762
1.7355
3.3100
0.3021
2.4869
4.6410
0.2155
3.1699
6.1051
0.1638
3.7908
7.7156
0.1296
4.3553
9.4872
0.1054
4.8684
11.4359
0.0874
5.3349
13.5795
0.0736
5.7590
15.9374
0.0627
6.1446
N
1
2
3
4
5
6
7
8
9
10
Compound
Amount
Factor
(F/P, i, N)
1.1000
1.2100
1.3310
1.4641
1.6105
1.7716
1.9487
2.1436
2.3579
2.5937
Present
Worth
Factor
(P/F, i, N)
0.9091
0.8264
0.7513
0.6830
0.6209
0.5645
0.5132
0.4685
0.4241
0.3855
Capital
Recovery
Factor
(A/P, i, N)
1.1000
0.5762
0.4021
0.3155
0.2638
0.2296
0.2054
0.1874
0.1736
0.1627
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