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Question 1. There are 3 sub-questions in the calculation with time value of money, please write down your answers on corresponding blank positions (Totally 15 marks). A magazine provides two subscription options. You can pay $240 now for the next five years, or you can make an annual payment of $65 at the end of each year. If you can invest the money at an interest rate of 10% over the next five years, which option should you choose? (1) Draw the cash fow diagram of this investment. (5 marks) (2) Compare to alternatives by NPV. (5 marks)
(3) Compare to alternatives by AV. (5 marks)
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