Determine the nominal value of each year for each proposal

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Reference no: EM131973289

"The Director of Marketing of you organization asks for your advice regarding sponsorship deals she is contemplating.

She has to choose between the following:

* A 15 year sponsorship paying $100,000 per year.

* A 15 year sponsorship initially paying $75,000 per year and increasing 5% each year.

* A 15 year sponsorship initially paying $45,000 per year and increasing 12% each year.

Questions:

1) Determine the nominal value of each year for each proposal, as well as the total present value of each proposal. Compute one outcome with a "discount rate" of 5% only.

2) Which proposal should the marketing director choose?

Reference no: EM131973289

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