(a)
To construct:A choice table for interest tables from 0% to 100% assuming doing nothing is allowed.
(a)

Answer to Problem 22P
From table below, from 0% to 4.7%, Alternative C should be preferred. Between 4.7% to 6.9%; Alternative B should be preferred. Alternative A should be preferred for interest rate between 6.9% to 8.2%.
Explanation of Solution
NPV of Alternative B
NPV of Alternative C
Choice table for interest from 0% to 100%
Interest rate | (A/P,i,2) | (A/P,i,4) | (P/A,i,8) | A | B | C |
0% | 0.500 | 0.250 | 8.000 | 400 | 600 | 850 |
1% | 0.508 | 0.256 | 7.652 | 337 | 502 | 693 |
2% | 0.515 | 0.263 | 7.325 | 278 | 411 | 546 |
3% | 0.523 | 0.269 | 7.020 | 224 | 326 | 409 |
4% | 0.530 | 0.275 | 6.733 | 174 | 248 | 280 |
5% | 0.538 | 0.282 | 6.463 | 128 | 174 | 158 |
6% | 0.545 | 0.289 | 6.210 | 85 | 106 | 44 |
7% | 0.553 | 0.295 | 5.971 | 45 | 43 | (63) |
8% | 0.561 | 0.302 | 5.747 | 8 | (17) | (164) |
9% | 0.568 | 0.309 | 5.535 | (26) | (72) | (259) |
10% | 0.576 | 0.315 | 5.335 | (58) | (124) | (349) |
11% | 0.584 | 0.322 | 5.146 | (88) | (172) | (434) |
12% | 0.592 | 0.329 | 4.968 | (116) | (218) | (515) |
13% | 0.599 | 0.336 | 4.799 | (142) | (261) | (591) |
14% | 0.607 | 0.343 | 4.639 | (166) | (301) | (663) |
15% | 0.615 | 0.350 | 4.487 | (189) | (338) | (731) |
16% | 0.623 | 0.357 | 4.344 | (210) | (374) | (795) |
17% | 0.631 | 0.365 | 4.207 | (230) | (407) | (857) |
18% | 0.639 | 0.372 | 4.078 | (249) | (439) | (915) |
19% | 0.647 | 0.379 | 3.954 | (266) | (469) | (971) |
20% | 0.655 | 0.386 | 3.837 | (283) | (497) | (1,023) |
21% | 0.662 | 0.394 | 3.726 | (298) | (523) | (1,073) |
22% | 0.670 | 0.401 | 3.619 | (313) | (548) | (1,121) |
23% | 0.678 | 0.408 | 3.518 | (326) | (572) | (1,167) |
24% | 0.686 | 0.416 | 3.421 | (339) | (595) | (1,210) |
25% | 0.694 | 0.423 | 3.329 | (351) | (616) | (1,252) |
26% | 0.702 | 0.431 | 3.241 | (363) | (637) | (1,292) |
27% | 0.711 | 0.439 | 3.156 | (374) | (656) | (1,330) |
28% | 0.719 | 0.446 | 3.076 | (384) | (675) | (1,366) |
29% | 0.727 | 0.454 | 2.999 | (394) | (692) | (1,401) |
30% | 0.735 | 0.462 | 2.925 | (403) | (709) | (1,434) |
31% | 0.743 | 0.469 | 2.854 | (412) | (725) | (1,466) |
32% | 0.751 | 0.477 | 2.786 | (420) | (740) | (1,496) |
33% | 0.759 | 0.485 | 2.721 | (428) | (755) | (1,526) |
34% | 0.767 | 0.493 | 2.658 | (436) | (769) | (1,554) |
35% | 0.776 | 0.501 | 2.598 | (443) | (782) | (1,581) |
36% | 0.784 | 0.509 | 2.540 | (450) | (795) | (1,607) |
37% | 0.792 | 0.517 | 2.485 | (456) | (808) | (1,632) |
38% | 0.800 | 0.525 | 2.432 | (462) | (819) | (1,656) |
39% | 0.808 | 0.533 | 2.380 | (468) | (831) | (1,679) |
40% | 0.817 | 0.541 | 2.331 | (474) | (842) | (1,701) |
41% | 0.825 | 0.549 | 2.283 | (479) | (852) | (1,723) |
42% | 0.833 | 0.557 | 2.237 | (484) | (862) | (1,743) |
43% | 0.842 | 0.565 | 2.193 | (489) | (872) | (1,763) |
44% | 0.850 | 0.573 | 2.150 | (494) | (881) | (1,783) |
45% | 0.858 | 0.582 | 2.109 | (499) | (891) | (1,801) |
46% | 0.867 | 0.590 | 2.069 | (503) | (899) | (1,819) |
47% | 0.875 | 0.598 | 2.030 | (507) | (908) | (1,836) |
48% | 0.883 | 0.606 | 1.993 | (511) | (916) | (1,853) |
49% | 0.892 | 0.615 | 1.957 | (515) | (924) | (1,869) |
50% | 0.900 | 0.623 | 1.922 | (519) | (931) | (1,885) |
51% | 0.908 | 0.631 | 1.888 | (523) | (939) | (1,900) |
52% | 0.917 | 0.640 | 1.856 | (526) | (946) | (1,915) |
53% | 0.925 | 0.648 | 1.824 | (529) | (953) | (1,929) |
54% | 0.934 | 0.657 | 1.793 | (533) | (960) | (1,943) |
55% | 0.942 | 0.665 | 1.764 | (536) | (966) | (1,956) |
56% | 0.951 | 0.674 | 1.735 | (539) | (973) | (1,969) |
57% | 0.959 | 0.682 | 1.707 | (542) | (979) | (1,982) |
58% | 0.968 | 0.691 | 1.680 | (544) | (985) | (1,994) |
59% | 0.976 | 0.699 | 1.653 | (547) | (991) | (2,006) |
60% | 0.985 | 0.708 | 1.628 | (550) | (996) | (2,017) |
61% | 0.993 | 0.717 | 1.603 | (552) | (1,002) | (2,029) |
62% | 1.002 | 0.725 | 1.579 | (555) | (1,007) | (2,039) |
63% | 1.010 | 0.734 | 1.555 | (557) | (1,013) | (2,050) |
64% | 1.019 | 0.743 | 1.533 | (559) | (1,018) | (2,060) |
65% | 1.027 | 0.751 | 1.510 | (562) | (1,023) | (2,070) |
66% | 1.036 | 0.760 | 1.489 | (564) | (1,028) | (2,080) |
67% | 1.045 | 0.769 | 1.468 | (566) | (1,032) | (2,089) |
68% | 1.053 | 0.778 | 1.447 | (568) | (1,037) | (2,099) |
69% | 1.062 | 0.786 | 1.427 | (570) | (1,042) | (2,108) |
70% | 1.070 | 0.795 | 1.408 | (572) | (1,046) | (2,116) |
71% | 1.079 | 0.804 | 1.389 | (574) | (1,050) | (2,125) |
72% | 1.088 | 0.813 | 1.371 | (576) | (1,055) | (2,133) |
73% | 1.096 | 0.822 | 1.353 | (578) | (1,059) | (2,141) |
74% | 1.105 | 0.831 | 1.335 | (579) | (1,063) | (2,149) |
75% | 1.114 | 0.840 | 1.318 | (581) | (1,067) | (2,157) |
76% | 1.122 | 0.848 | 1.301 | (583) | (1,071) | (2,164) |
77% | 1.131 | 0.857 | 1.285 | (585) | (1,074) | (2,172) |
78% | 1.140 | 0.866 | 1.269 | (586) | (1,078) | (2,179) |
79% | 1.148 | 0.875 | 1.254 | (588) | (1,082) | (2,186) |
80% | 1.157 | 0.884 | 1.239 | (589) | (1,085) | (2,193) |
81% | 1.166 | 0.893 | 1.224 | (591) | (1,089) | (2,199) |
82% | 1.175 | 0.902 | 1.209 | (592) | (1,092) | (2,206) |
83% | 1.183 | 0.911 | 1.195 | (594) | (1,096) | (2,212) |
84% | 1.192 | 0.920 | 1.181 | (595) | (1,099) | (2,218) |
85% | 1.201 | 0.929 | 1.168 | (596) | (1,103) | (2,224) |
86% | 1.210 | 0.938 | 1.155 | (598) | (1,106) | (2,230) |
87% | 1.218 | 0.947 | 1.142 | (599) | (1,109) | (2,236) |
88% | 1.227 | 0.957 | 1.129 | (600) | (1,112) | (2,242) |
89% | 1.236 | 0.966 | 1.117 | (602) | (1,115) | (2,247) |
90% | 1.245 | 0.975 | 1.105 | (603) | (1,118) | (2,253) |
91% | 1.254 | 0.984 | 1.093 | (604) | (1,121) | (2,258) |
92% | 1.262 | 0.993 | 1.081 | (605) | (1,124) | (2,264) |
93% | 1.271 | 1.002 | 1.070 | (607) | (1,127) | (2,269) |
94% | 1.280 | 1.011 | 1.059 | (608) | (1,130) | (2,274) |
95% | 1.289 | 1.021 | 1.048 | (609) | (1,132) | (2,279) |
96% | 1.298 | 1.030 | 1.037 | (610) | (1,135) | (2,283) |
97% | 1.307 | 1.039 | 1.026 | (611) | (1,138) | (2,288) |
98% | 1.316 | 1.048 | 1.016 | (612) | (1,140) | (2,293) |
99% | 1.324 | 1.057 | 1.006 | (613) | (1,143) | (2,297) |
100% | 1.333 | 1.067 | 0.996 | (614) | (1,146) | (2,302) |
(b)
To construct:A choice table for interest tables from 0% to 100% assuming A, B o r C must be chosen.
(b)

Answer to Problem 22P
From table below, from 0% to 4.7%, Alternative C should be preferred. Between 4.7% to 6.9%; Alternative B should be preferred. Beyond that Alternative A should be preferred for interest rate between 6.9% to 100%.
Explanation of Solution
NPV of Alternative A
NPV of Alternative B
NPV of Alternative C
Choice table for interest from 0% to 100%
Interest rate | (A/P,i,2) | (A/P,i,4) | (P/A,i,8) | A | B | C |
0% | 0.500 | 0.250 | 8.000 | 400 | 600 | 850 |
1% | 0.508 | 0.256 | 7.652 | 337 | 502 | 693 |
2% | 0.515 | 0.263 | 7.325 | 278 | 411 | 546 |
3% | 0.523 | 0.269 | 7.020 | 224 | 326 | 409 |
4% | 0.530 | 0.275 | 6.733 | 174 | 248 | 280 |
5% | 0.538 | 0.282 | 6.463 | 128 | 174 | 158 |
6% | 0.545 | 0.289 | 6.210 | 85 | 106 | 44 |
7% | 0.553 | 0.295 | 5.971 | 45 | 43 | (63) |
8% | 0.561 | 0.302 | 5.747 | 8 | (17) | (164) |
9% | 0.568 | 0.309 | 5.535 | (26) | (72) | (259) |
10% | 0.576 | 0.315 | 5.335 | (58) | (124) | (349) |
11% | 0.584 | 0.322 | 5.146 | (88) | (172) | (434) |
12% | 0.592 | 0.329 | 4.968 | (116) | (218) | (515) |
13% | 0.599 | 0.336 | 4.799 | (142) | (261) | (591) |
14% | 0.607 | 0.343 | 4.639 | (166) | (301) | (663) |
15% | 0.615 | 0.350 | 4.487 | (189) | (338) | (731) |
16% | 0.623 | 0.357 | 4.344 | (210) | (374) | (795) |
17% | 0.631 | 0.365 | 4.207 | (230) | (407) | (857) |
18% | 0.639 | 0.372 | 4.078 | (249) | (439) | (915) |
19% | 0.647 | 0.379 | 3.954 | (266) | (469) | (971) |
20% | 0.655 | 0.386 | 3.837 | (283) | (497) | (1,023) |
21% | 0.662 | 0.394 | 3.726 | (298) | (523) | (1,073) |
22% | 0.670 | 0.401 | 3.619 | (313) | (548) | (1,121) |
23% | 0.678 | 0.408 | 3.518 | (326) | (572) | (1,167) |
24% | 0.686 | 0.416 | 3.421 | (339) | (595) | (1,210) |
25% | 0.694 | 0.423 | 3.329 | (351) | (616) | (1,252) |
26% | 0.702 | 0.431 | 3.241 | (363) | (637) | (1,292) |
27% | 0.711 | 0.439 | 3.156 | (374) | (656) | (1,330) |
28% | 0.719 | 0.446 | 3.076 | (384) | (675) | (1,366) |
29% | 0.727 | 0.454 | 2.999 | (394) | (692) | (1,401) |
30% | 0.735 | 0.462 | 2.925 | (403) | (709) | (1,434) |
31% | 0.743 | 0.469 | 2.854 | (412) | (725) | (1,466) |
32% | 0.751 | 0.477 | 2.786 | (420) | (740) | (1,496) |
33% | 0.759 | 0.485 | 2.721 | (428) | (755) | (1,526) |
34% | 0.767 | 0.493 | 2.658 | (436) | (769) | (1,554) |
35% | 0.776 | 0.501 | 2.598 | (443) | (782) | (1,581) |
36% | 0.784 | 0.509 | 2.540 | (450) | (795) | (1,607) |
37% | 0.792 | 0.517 | 2.485 | (456) | (808) | (1,632) |
38% | 0.800 | 0.525 | 2.432 | (462) | (819) | (1,656) |
39% | 0.808 | 0.533 | 2.380 | (468) | (831) | (1,679) |
40% | 0.817 | 0.541 | 2.331 | (474) | (842) | (1,701) |
41% | 0.825 | 0.549 | 2.283 | (479) | (852) | (1,723) |
42% | 0.833 | 0.557 | 2.237 | (484) | (862) | (1,743) |
43% | 0.842 | 0.565 | 2.193 | (489) | (872) | (1,763) |
44% | 0.850 | 0.573 | 2.150 | (494) | (881) | (1,783) |
45% | 0.858 | 0.582 | 2.109 | (499) | (891) | (1,801) |
46% | 0.867 | 0.590 | 2.069 | (503) | (899) | (1,819) |
47% | 0.875 | 0.598 | 2.030 | (507) | (908) | (1,836) |
48% | 0.883 | 0.606 | 1.993 | (511) | (916) | (1,853) |
49% | 0.892 | 0.615 | 1.957 | (515) | (924) | (1,869) |
50% | 0.900 | 0.623 | 1.922 | (519) | (931) | (1,885) |
51% | 0.908 | 0.631 | 1.888 | (523) | (939) | (1,900) |
52% | 0.917 | 0.640 | 1.856 | (526) | (946) | (1,915) |
53% | 0.925 | 0.648 | 1.824 | (529) | (953) | (1,929) |
54% | 0.934 | 0.657 | 1.793 | (533) | (960) | (1,943) |
55% | 0.942 | 0.665 | 1.764 | (536) | (966) | (1,956) |
56% | 0.951 | 0.674 | 1.735 | (539) | (973) | (1,969) |
57% | 0.959 | 0.682 | 1.707 | (542) | (979) | (1,982) |
58% | 0.968 | 0.691 | 1.680 | (544) | (985) | (1,994) |
59% | 0.976 | 0.699 | 1.653 | (547) | (991) | (2,006) |
60% | 0.985 | 0.708 | 1.628 | (550) | (996) | (2,017) |
61% | 0.993 | 0.717 | 1.603 | (552) | (1,002) | (2,029) |
62% | 1.002 | 0.725 | 1.579 | (555) | (1,007) | (2,039) |
63% | 1.010 | 0.734 | 1.555 | (557) | (1,013) | (2,050) |
64% | 1.019 | 0.743 | 1.533 | (559) | (1,018) | (2,060) |
65% | 1.027 | 0.751 | 1.510 | (562) | (1,023) | (2,070) |
66% | 1.036 | 0.760 | 1.489 | (564) | (1,028) | (2,080) |
67% | 1.045 | 0.769 | 1.468 | (566) | (1,032) | (2,089) |
68% | 1.053 | 0.778 | 1.447 | (568) | (1,037) | (2,099) |
69% | 1.062 | 0.786 | 1.427 | (570) | (1,042) | (2,108) |
70% | 1.070 | 0.795 | 1.408 | (572) | (1,046) | (2,116) |
71% | 1.079 | 0.804 | 1.389 | (574) | (1,050) | (2,125) |
72% | 1.088 | 0.813 | 1.371 | (576) | (1,055) | (2,133) |
73% | 1.096 | 0.822 | 1.353 | (578) | (1,059) | (2,141) |
74% | 1.105 | 0.831 | 1.335 | (579) | (1,063) | (2,149) |
75% | 1.114 | 0.840 | 1.318 | (581) | (1,067) | (2,157) |
76% | 1.122 | 0.848 | 1.301 | (583) | (1,071) | (2,164) |
77% | 1.131 | 0.857 | 1.285 | (585) | (1,074) | (2,172) |
78% | 1.140 | 0.866 | 1.269 | (586) | (1,078) | (2,179) |
79% | 1.148 | 0.875 | 1.254 | (588) | (1,082) | (2,186) |
80% | 1.157 | 0.884 | 1.239 | (589) | (1,085) | (2,193) |
81% | 1.166 | 0.893 | 1.224 | (591) | (1,089) | (2,199) |
82% | 1.175 | 0.902 | 1.209 | (592) | (1,092) | (2,206) |
83% | 1.183 | 0.911 | 1.195 | (594) | (1,096) | (2,212) |
84% | 1.192 | 0.920 | 1.181 | (595) | (1,099) | (2,218) |
85% | 1.201 | 0.929 | 1.168 | (596) | (1,103) | (2,224) |
86% | 1.210 | 0.938 | 1.155 | (598) | (1,106) | (2,230) |
87% | 1.218 | 0.947 | 1.142 | (599) | (1,109) | (2,236) |
88% | 1.227 | 0.957 | 1.129 | (600) | (1,112) | (2,242) |
89% | 1.236 | 0.966 | 1.117 | (602) | (1,115) | (2,247) |
90% | 1.245 | 0.975 | 1.105 | (603) | (1,118) | (2,253) |
91% | 1.254 | 0.984 | 1.093 | (604) | (1,121) | (2,258) |
92% | 1.262 | 0.993 | 1.081 | (605) | (1,124) | (2,264) |
93% | 1.271 | 1.002 | 1.070 | (607) | (1,127) | (2,269) |
94% | 1.280 | 1.011 | 1.059 | (608) | (1,130) | (2,274) |
95% | 1.289 | 1.021 | 1.048 | (609) | (1,132) | (2,279) |
96% | 1.298 | 1.030 | 1.037 | (610) | (1,135) | (2,283) |
97% | 1.307 | 1.039 | 1.026 | (611) | (1,138) | (2,288) |
98% | 1.316 | 1.048 | 1.016 | (612) | (1,140) | (2,293) |
99% | 1.324 | 1.057 | 1.006 | (613) | (1,143) | (2,297) |
100% | 1.333 | 1.067 | 0.996 | (614) | (1,146) | (2,302) |
Want to see more full solutions like this?
Chapter 8 Solutions
ENGR.ECONOMIC ANALYSIS W/DASHBOARD
- not use ai pleasearrow_forwardand u (C1, C2) = 1/2 = f) Derive analytically and show graphically the solution under other util- ity functions such as u (C1, C2) ac₁+bc2 where a, b > 0, u (C1, C2) = ac₁+bc1/2 acbc2 (assume that the agent is sufficiently rich to avoid the corner solution). What of these utility functions reflects best your own preferences (or indicate other utility function that represent your pref- erences).arrow_forwardnot use ai please don'tarrow_forward
- Explain if any states are not a “friendly” place for tax preparers, payday lenders, title pawn lenders, and “credit approved” used car dealers to operate in and what they have done, regulation-wise.arrow_forwardExplain the regulation or lack of regulation of payday lenders, title pawn lenders, and “credit-approved” used car dealers in Alabama.arrow_forwardExplain why people should avoid the business model of payday lenders, title pawn lenders, and “credit approved” used car dealers.arrow_forward
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage LearningEssentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningBrief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning




