Consider the following alternatives: i. $ 150 received in one year ii. $ 210 received in five years iii. $ 350 received in 10 years

a. Rank the alternatives from most valuable to least valuable if the interest rate is 8 % per year.

b. What is your ranking if the interest rate is 3 % per year?

c. What is your ranking if the interest rate is 14 % per year?

a. Rank the alternatives from most valuable to least valuable if the interest rate is 8 % per year. First calculate the present value (PV) of each alternative: The PV of $ 150 received in one year if the interest rate is 8 % per year is $ ___. (Round to the nearest cent.)

The PV of $ 210 received in 5 years if the interest rate is 8 % per year is $___. (Round to the nearest cent.) The PV of $ 350 received in 10 years if the interest rate is 8 % per year is $ __. (Round to the nearest cent.)

Next, rank the choices by their PV:(Select the best choice below.)

A. The ranking of the projects is: option iii > option i > option ii.

B. The ranking of the projects is: option ii > option iii > option i.

C. The ranking of the projects is: option iii > option ii > option i.

D. The ranking of the projects is: option i > option ii > option iii.

b. What is your ranking if the interest rate is only 3 % per year? First calculate the present value (PV) of each alternative: The PV of $ 150 received in one year if the interest rate is 3 % per year is $ __. (Round to the nearest cent.) The PV of $ 210 received in 5 years if the interest rate is 3 % per year is $ __. (Round to the nearest cent.)

The PV of $ 350 received in 10 years if the interest rate is 3 % per year is $ __. (Round to the nearest cent.)

Next rank the choices by their PV:(Select the best choice below.)

A. The ranking of the projects is: option i > option ii > option iii.

B. The ranking of the projects is: option ii > option iii > option i.

C. The ranking of the projects is: option iii > option ii > option i.

D. The ranking of the projects is: option iii > option i > option ii.

c. What is your ranking if the interest rate is 14 % per year?

First calculate the present value (PV) of each alternative:

The PV of $ 150 received in one year if the interest rate is 14 % per year is $ nothing. (Round to the nearest cent.) The PV of $ 210 received in 5 years if the interest rate is 14 % per year is $ nothing. (Round to the nearest cent.) The PV of $ 350 received in 10 years if the interest rate is 14 % per year is $ nothing. (Round to the nearest cent.)

Next rank the choices by their PV: (Select the best choice below.)

A. The ranking of the projects is: option i > option ii > option iii.

B. The ranking of the projects is: option i > option iii > option ii.

C. The ranking of the projects is: option ii > option i > option iii.

D. The ranking of the projects is: option iii > option ii > option i.