Compute the present worth for each loan option

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Reference no: EM132706970

The store owner has asked you to develop a decision support tool (e.g., a spreadsheet) that allows the store to compare these four loan options under various interest rates and minimum attractive rate of return (MARR) for the store. In addition to the tool, they expect your report to include the following information:

Question a) Vary both rates from 5% to 20% in 1% increments and compute the present worth for each loan option under each scenario.

Question b) What is the most economical loan option if the borrower's MARR is greater than the lender's interest rate?

Question c) What is the most economical loan option if the borrower's MARR is equal to the lender's interest rate?

Question d) What is the most economical loan option if the borrower's MARR is less than the lender's interest rate?

Question e) Clearly explain the reason behind your findings for the three cases in parts (b)-(d).

Reference no: EM132706970

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