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en the investnent atteanatives to analyze The Cash, Flnas Fran these Thwec inuestenit areas o lUe 21, Doo obD 6,o0o 16の00 2 5
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Answer #1
Investment A:
PV = 16000*(1.22^5-1)/(0.22*1.22^5) = $          45,818
Investment B:
PV = ((16000*(1.22^6-1)/(0.22*1.22^6))/1.22^4 = $          22,873
Investment C:
PV = 21000/1.22+63000/1.22^6+21000/1.22^10 = $          39,195
ALTERNATIVE SOLUTIONS:
INVESTMENT A:
Year Cash flow PVIF at 22% PV at 22%
1 16000 0.81967 13115
2 16000 0.67186 10750
3 16000 0.55071 8811
4 16000 0.45140 7222
5 16000 0.37000 5920
6 0.30328 0
7 0.24859 0
8 0.20376 0
9 0.16702 0
10 0.13690 0
45818
INVESTMENT B:
Year Cash flow PVIF at 22% PV at 22%
1 0.81967 0
2 0.67186 0
3 0.55071 0
4 0.45140 0
5 16000 0.37000 5920
6 16000 0.30328 4852
7 16000 0.24859 3977
8 16000 0.20376 3260
9 16000 0.16702 2672
10 16000 0.13690 2190
22873
INVESTMENT C:
Year Cash flow PVIF at 22% PV at 22%
1 21000 0.81967 17213
2 0.67186 0
3 0.55071 0
4 0.45140 0
5 0.37000 0
6 63000 0.30328 19107
7 0.24859 0
8 0.20376 0
9 0.16702 0
10 21000 0.13690 2875
39195
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