Case Study Exercises Help John with the analysis by doing the following: 1. Develop the actual cash flow series and incremental cash flow series (in $1000 units) for all five options in preparation for an incremental ROR analysis. Discuss the possibility of multiple rate of return values for all the actual and incremental cash flow series. Find any multiple rates in the range of 0% to 100% If John's father insists that he make 25% per year or more on the selected option over the next 10 years, what should he do? Use all the methods of economic analysis you have learned so far (PW, AW, ROR) so John's father can understand the recommendation in one way or another. Prepare plots of the PW versus i for each of the five options. Estimate the breakeven rate of return between options. What is the minimum amount that must be received in each of years 5 through 8 for option 3 (the one Elmer wants) to be best economically? Given this amount, what does the sale price have to be, assuming the same payment arrangement as presented above? 2. 3. 4. 5. Case Study Exercises Help John with the analysis by doing the following: 1. Develop the actual cash flow series and incremental cash flow series (in $1000 units) for all five options in preparation for an incremental ROR analysis. Discuss the possibility of multiple rate of return values for all the actual and incremental cash flow series. Find any multiple rates in the range of 0% to 100% If John's father insists that he make 25% per year or more on the selected option over the next 10 years, what should he do? Use all the methods of economic analysis you have learned so far (PW, AW, ROR) so John's father can understand the recommendation in one way or another. Prepare plots of the PW versus i for each of the five options. Estimate the breakeven rate of return between options. What is the minimum amount that must be received in each of years 5 through 8 for option 3 (the one Elmer wants) to be best economically? Given this amount, what does the sale price have to be, assuming the same payment arrangement as presented above? 2. 3. 4. 5