Question
Hi. Could you please help me these questions? Thanks Question 1 A manager is deciding between two marketing campaigns: Campaign A will generate net returns
Hi. Could you please help me these questions? Thanks
Question 1
A manager is deciding between two marketing campaigns:
- Campaign Awill generate net returns of $120,000 one yearfrom now and $30,000 two years from now.
Campaign Bwill generate net returns of $45,000 two yearsfrom now and $120,000 four years from now.
The required rate of return is 7.00%.
a.What is the Discounted Cash Flow (DCF) of Campaign A?
b.What is the Discounted Cash Flow (DCF) of Campaign B?
Round to the nearest cent
c.Which campaign is economically better for the company? Campaign A or Campaign B?
Question 2
Anna was offered two options for a car she was purchasing:
+ Lease option:Pay lease amounts of $550 at the beginning of every month for 6 years. At the the end of 6 years, purchase the car for $11,500.
+ Buy option:Purchase the car immediately for $22,500.
The money is worth 6.50% compounded monthly.
a.What is the Discounted Cash Flow (DCF) for the lease option?
Round to the nearest cent
b.Which is the better option? Lease Option or Buy Option?
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