Calculate the present worth of both projects

Assignment Help Financial Management

Reference no: EM131579096

You are considering two investment options. In option A, you have to invest $4500 now and $1000 three years from now. In option B, you have to invest $3500 now, $1000 a year from now, and $1000 three years from now. In both options, you will receive four annual payments of exist2000 each (you will get the first $2000 payment a year from now). Which of these two options would you choose based on the present worth criterion? Assume the interest rate is 10%.

Calculate the present worth of both projects.

Reference no: EM131579096

Questions Cloud

What if you wait ten years before contributing : You have just made your first $4,000 contribution to your individual retirement account. What if you wait 10 years before contributing?

Purchasing corporate bond with semi-annual coupon payments : You are thinking of purchasing a corporate bond with semi-annual coupon payments.

Projects unit sales for new seven-octave voice emulation : Aria Acoustics, Inc., (AAI) projects unit sales for a new seven-octave voice emulation implant as follows: What is the IRR of the project?

How sensitive is ocf to changes in quantity sold : Consider a three-year project with the following information: initial fixed asset investment = $850,000; How sensitive is OCF to changes in quantity sold?

Calculate the present worth of both projects : You are considering two investment options. Calculate the present worth of both projects.

Four-year project to improve its production efficiency : CSM Machine Shop is considering a four-year project to improve its production efficiency. Calculate the NPV

Calculate the payback period for project : Calculate the payback period for this project. Calculate the IRR for this project.

What is the geometric average return for this time period : A stock had returns of 12 percent, 6 percent, 13 percent, -11 percent, What is the geometric average return for this time period?

Save money for your son education : You are going to save money for your son’s education. How much money will be in the account at the end of that time period?

User Account

All Pages