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Consider the following two options: Plan A requires a $210,000 upfront investment. Plan B requires a $155,155 upfront investment and an additional $70,000 investment later.
Consider the following two options:
Plan A requires a $210,000 upfront investment.
Plan B requires a $155,155 upfront investment and an additional $70,000 investment later.
At an interest rate of 5%, determine the breakeven point for the timing for the $70,000 investment when the present cost of the two alternatives are equal. Also determine which plan is the better alternative. Please use the compound interest table.
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