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A company intends to invest in a new painting hall. There are two complete investment options, Alt A and alt B. Below are these two
A company intends to invest in a new painting hall. There are two complete investment options, Alt A and alt B. Below are these two options: Alt A Alt B Basic investment 2600 1800 Surplus of payments in 1,470,410 Payment surplus year 2,470,410 Surplus of payment year 3,470,410 Payment surplus year 4,470,410 Payment surplus year 5,470,410 Surplus of payments in 6,470,410 Surplus of payments in 7,470 Surplus of payments in 8,470 Residual value after year 6 0 Residual value after year 8 60 All amounts in thousands of kronor! Option A has a lifespan of 8 years and Option B of 6 years. The discount rate is 8%. Show three relevant ways to compare investments. Write these clearly under points 1, 2 and 3. Calculate and explain why you used each calculation method! Choose options and motivate!
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