28. You inherited $500,000 and need to invest it in a property that will generate revenue in the future. One option is to invest it in a franchise that results in unequal cash flows and the other option is to invest it in a recreational facility that the city will lease from you every year. Compute the cash payback for each investment as well as the Net Present Value. Use 12% as your rate when computing your net present value with the tables attached at the end of this document. Option 2: Rec Facility 5 Year contract with $175,000 Option 1: Franchise Year 1: $175,000 Year 2: $189,000 Year 3: $158,000 Year 4: $190,000 Year 5: $210,000 29. Which option would you choose and why? 1496 1396 12% 11% Present Value of $1 at Compound Interest Due in n Periods Periods 8% 9% 10% 0.92593 0.85734 0.79383 0.73503 0.68058 1 2 3 4 5 0.91743 0.84168 0.77218 0.70843 0.64993 0.90909 0.82645 0.75131 0.68301 0.62092 0.90090 0.81162 0.73119 0.65873 0.59345 0.89286 0.79719 0.71178 0.63552 0.56743 0.88496 0.78315 0.69305 0.61332 0.54276 0.87719 0.76947 0.67497 0.59208 0.51937 6 7 8 9 10 0.63017 0.58349 0.54027 0.50025 0.46319 0.59627 0.54703 0.50187 0.46043 0.42241 0.56447 0.51316 0.46651 0.42410 0.38554 0.53464 0.48166 043393 0.39092 0.35218 0.50663 0.45235 0.40388 0.36061 0.32197 0.48032 0.42506 037616 0.33288 0.29459 0.45559 0.39964 0.35056 0.30751 0.26974 Present Value of Ordinary Annuity of $1 per Perlod Periods 8% 9% 10% 14% 11% 12% 13% 1 2 3 4 5 0.92593 1.78326 2.57710 3.31213 3.99271 0.91743 1.75911 2.53129 3.23972 3.88965 0.90909 1.73554 248685 3.16987 3.79079 0.90090 1.71252 2.44371 3.10245 3.69590 0.89286 1.69005 2.40183 3.03735 3.60478 0.88496 1.66810 2.36115 2.97447 3.51723 0.87719 1.64666 2.32163 2.91371 3.43308 6 7 8 9 10 2288 5.20637 5.74664 6.24689 6.71008 448592 5,03295 5.53482 5.99525 6.41766 4.35526 4.86842 5.33493 5.75902 6.14457 4.23054 4.71220 5.14612 5.53705 5.88923 4.11141 4.56376 4.96764 5.32825 5.65022 3.99755 4.42261 4.79677 5.13166 5.42624 3.88867 4.28830 4.63886 4.94637 5.21612