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Can someone help me figure out what formulas to put? 5 (b) The Image P2.2 has the pricing structure for the Ohio datacenter for Linux
Can someone help me figure out what formulas to put?
5 (b) The Image P2.2 has the pricing structure for the Ohio datacenter for Linux "a1.4xlarge" server for Standard 3-Year Term. Assume that the monthly payments are done at the end of the month. Compute the monthly payments' present value and suggest whether the firm should opt for No Upfront or All upfront payment option. Hint: If the monthly payment's present value is more than the upfront payment, you should prefer the upfront payment option. Firm's annualised required rate of return is 10% pa. () Write formula in cell C19 to compute the monthly required rate of return. (ii) Enter the values of number of periods, Monthly payments and Type in cells C20, C21 and C23 respectively. (iii) Write a formula in cell C25 to compute the present value of the monthly paments. (iv) In cell C26, select your recommended payment option from the dropdown. 10.000% Image P2.2 Correct Answer STANDARD 3-YEAR TERM Annual Required Rate Monthly Required Rate Number of periods (Nper) Monthly Payments (PMT) Future Value (FV) ) Type Present Value (PV) $3,988.57 Payment Option Upfront Monthly 0 OR No Upfront $0 $128.70 Present Value (PV) $3,988.57 Partial Upfront $2,144 $59.57 Present Value (PV) Choose your recommendation Select from the list All Upfront $4,032 $0.00 6. The management has decided to go for upfront payments for 1-year instances. AWS has tie-up with eCommerceBanque Inc, wherein the bank provides loan to AWS customers for paying the upfornt payment for the reserved instance. The bank has provided loan of $2102 to the firm. The loan duration is for 1 year and the payments are required to be paid monthly (at the end). The monthly payment is $187.61 (that is the same amount charged by AWS). (1) Enter the values of number of periods, Monthly payments, Present Value and Type in cells C32, C33, C34 and C36 respectively. (ii) Write a formula in cell C37 to compute the monthly interest rate charged by the bank. (iii) Write a formula in cell C38 to convert the value calculated in C37 to annual rate. Correct Answer Nper PMT PV Future Value (FV) Type Rate Annualized Rate (APR) Rate Annualized Rate (APR) 1.072% 12.863% 0Step by Step Solution
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