Question

This Question: 15 pts Hime Remaining: 01:07:40 Submit Test 2 of 6 (0 complete) This Test: 100 pts possible Today, you have $35,000 to invest. Two investment alternatives are available to you. One would require you to invest your $35,000 now, the other would require the $35,000 investment two years from now. In either case the investments will end five years from now. The cash flows for each alternative are provided below. Using a MARR of 14% what should you do with the $35,000 you have? Click the icon to view the alternatives description Click the icon to view the interest and annuity table for discrete compounding when the MARR is 14% per year More Info The FW of the Alternative 1 is $(Round to the nearest dollar) The FW of the Alternative 2 is $(Round to the nearest dollar) PIA should be selected N 1 2 3 0 6073 4 5 More Info - X Alternative 1 - $35.000 $14,000 $14.000 $14.000 $15.000 $15.000 To Far Given P FIP 1.1400 1.2996 1.4815 1.6890 1.9254 2. 1950 25023 2 8526 3.2519 3.7072 4 2262 4.8179 5 4924 6.2613 7.1379 8.1372 9.2765 10.5752 120557 13.7435 15.6676 17.8610 20 3616 23.2122 26.1619 Alternative 2 $0 $0 $35.000 $19,500 $19.500 $19.500 To Find Given PIA 0.8772 0.7695 0.6750 0.5921 0.5194 0 4556 0.3996 0 3506 0 3075 0 2697 0.2366 0.2076 0 1821 0.1597 0 1401 0 1229 0.1078 0.0946 0.0829 0.0728 0.0638 0.0560 0 0491 0.0431 0.1378 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0 1834 To Fina 10 Find Given A Given HA 1.0000 0.8772 2 1400 1.6467 3.4396 2.3216 49211 2.9137 6.6101 3.4331 8 5355 3.8887 10.7305 4.2883 13.2328 4.6389 16.0853 4.9464 19.3373 52161 23.0445 54527 27 2707 5.6603 320887 5.8424 37 5811 6.0021 43.8424 6.1422 50.9804 6.2651 59. 1176 63729 68.3941 6.4674 78 9692 6.5504 91.0249 66231 104.7684 6.6870 120 4360 6.7429 138 2970 6.7921 158 6586 68351 181 ATAR 6879 0 10 Find To Find A Given Given P AF AIP 1.0000 1.1400 0.4673 0 2907 0.4307 0.2032 0.3432 0.1513 0.2913 0 1172 0.2572 0.0932 0.2332 0 0756 0.2156 0 0622 0 2022 0 0517 0.1917 0.0434 0.0367 0 1767 0.0312 0.1712 0.0266 0 1666 0.0228 0.1628 0.0196 0.1596 0.0169 0.1569 0.0146 0.1546 0.0127 0 1527 0.0110 0.1510 0.0095 0 1495 0.0083 0.1483 0 0072 0.1472 0.0063 0 1463 0055 1456 Print Done Enter your answer in each of the answer boxes MacBook Air

Answer 1

NPV of alternative 1:
Year (n)	Particulars	Cash flows	PVF (14%, year) (1/(1+r)^n)	Discouted cash flows
0	Initial cost	-35,000.00	1.0000	-35,000.00
1	Cash inflows	14,000.00	0.8772	12,280.70
2	Cash inflows	14,000.00	0.7695	10,772.55
3	Cash inflows	14,000.00	0.6750	9,449.60
4	Cash inflows	15,000.00	0.5921	8,881.20
5	Cash inflows	15,000.00	0.5194	7,790.53
Net Present Value	14,174.58
NPV of alternative 1:
Year (n)	Particulars	Cash flows	PVF (14%, year) (1/(1+r)^n)	Discouted cash flows
0
1
2	Initial cost	-35,000.00	0.7695	-26,931.36
3	Cash inflows	19,500.00	0.6750	13,161.94
4	Cash inflows	19,500.00	0.5921	11,545.57
5	Cash inflows	19,500.00	0.5194	10,127.69
Net Present Value	7,903.84
So, Alternative 1 will be selected.Since, Net benefit is high.