You are considering two investment options. In option A, you have to invest RM5000 now and RM1000 three years from now, In option B, you have to invest RM2500 now, RM1500 a year from now, and RM1000 three years from now. In both options, you will receive four annual payments of RM2000 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 8% interest? Based on conventional payback period method, choose either (A/B/Both) Format: PW Option A Format: Format: PW Option B Based on PW analysis method, choose Option (A or B) Format:
You are considering two investment options. In option A, you have to invest RM5000 now and RM1000 three years from now, In option B, you have to invest RM2500 now, RM1500 a year from now, and RM1000 three years from now. In both options, you will receive four annual payments of RM2000 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 8% interest? Based on conventional payback period method, choose either (A/B/Both) Format: PW Option A Format: Format: PW Option B Based on PW analysis method, choose Option (A or B) Format:
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 12P
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