Example Question Consider choosing between two investment plans, A and B, which have the following characteristics:...

Transcribed Image Text:

Example Question Consider choosing between two investment plans, A and B, which have the following characteristics: A B Initial cost ($) 10,000 15,000 Annual return ($) 2,000 3,000 Lifetime (years) 10 7 Assuming a 5% compound interest rate, which is the better plan? Use each of the following measures in the analysis: Present Worth Benefit:Cost Ratio Payback Period (PBP) Internal Rate of Return (IRR) Example Question Consider choosing between two investment plans, A and B, which have the following characteristics: A B Initial cost ($) 10,000 15,000 Annual return ($) 2,000 3,000 Lifetime (years) 10 7 Assuming a 5% compound interest rate, which is the better plan? Use each of the following measures in the analysis: Present Worth Benefit:Cost Ratio Payback Period (PBP) Internal Rate of Return (IRR)