You are given TWO plans to join a professional association. an X requires a payment of...
You are given TWO plans to join a professional association. an X requires a payment of $185 starting in year 0, and three other equal payments of $185, for years ONE, TWO and THREE. Plan Y requires a One- time payment of $500 NOW and no further payments. Assuming an analysis period of 4 years, which plan would you select based on Rate of Return method. The required MARR is 10%.
a. Draw the cash flow diagrams for the two alternatives
b. Complete the cash flow table & the differential cash flow Differential Cash Flow Year
| year | Plan-x | Plan-y | Differential Cash Flow |
c. Draw the differential cash flow diagram
d. Calculate ROR
What is the calculated ROR? ____________
e. Selection criteria: ______________
e. Decision - Choose Alt._______
Homework Answers
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You are given TWO plans to join a professional association. an X
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