How do I solve for A?

Daryl Kearns saved $260.000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $189.500. The following table presents the estimated cash inflows for the two alternatives Opportunity #1 Opportunity #2 Year 1 $ 55,645 103,200 Year 2 $ 58,930 199, eee Year 3 $78, 800 16,600 Year 4 $101,360 15,900 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate: it is 9 percent (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr Kearns adopt based on the net present value approach? b. Compute the payback period for each opportunity. Which should Mr. Kearns adopt based on the payback approach? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? (Round your intermediate calculations and final answer to two decimal places.) Net Present Value Opportunity 1 Opportunity 2 Which opportunity should be chosen? Opportunity 1 TABLE 1 PRESENT VALUE OF $1 4% 5% 6% 7% 8% 9% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 2. 0.924556 0.907029 0.889996 0.873439 0.857339 0.841680 3 0.888996 0.863838 0.839619 0.816298 0.793832 0.772183 4 0.854804 0.822702 0.792094 0.762895 0.735030 0.708425 5 0.821927 0.783526 0.747258 0.712986 0.680583 0.649931 6 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 7 0.759918 0.710681 0.665057 0.622750 0.583490 0.547034 8 0.730690 0.676839 0.627412 0.582009 0.540269 0.501866 9 0.702587 0.644609 0.591898 0.543934 0.500249 0.460428 10 0.675564 0.613913 0.558395 0.508349 0.463193 0.422411 11 0.649581 0.584679 0.526788 0.475093 0.428883 0.387533 12 0.624597 0.556837 0.496969 0.444012 0.397114 0.355535 13 0.600574 0.530321 0.468839 0.414964 0.367698 0.326179 14 0.577475 0.505068 0.442301 0.387817 0.340461 0.299246 15 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 16 0.533908 0.458112 0.393646 0.338735 0.291890 0.251870 17 0.513373 0.436297 0.371364 0.316574 0.270269 0.231073 18 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 19 0.474642 0.395734 0.330513 0.276508 0.231712 0.194490 20 0.456387 0.376889 0.311805 0.258419 0.214548 0.178431 10% 12% 0.909091 0.892857 0.826446 0.797194 0.751315 0.711780 0.683013 0.635518 0.620921 0.567427 0.564474 0.506631 0.513158 0.452349 0.466507 0.403883 0.424098 0.360610 0.385543 0.321973 0.350494 0.287476 0.318631 0.256675 0.289664 0.229174 0.263331 0.204620 0.239392 0.182696 0.217629 0.163122 0.197845 0.145644 0.179859 0.130040 0.163508 0.116107 0.148644 0.103667 14% 16% 20% 0.877193 0.862069 0.833333 0.769468 0.743163 0.694444 0.674972 0.640658 0.578704 0.592080 0.552291 0.482253 0.519369 0.476113 0.401878 0.455587 0.410442 0.334898 0.399637 0.353830 0.279082 0.350559 0.305025 0.232568 0.307508 0.262953 0.193807 0.269744 0.226684 0.161506 0.236617 0.195417 0.134588 0.207559 0.168463 0.112157 0.182069 0.145227 0.093464 0.159710 0.125195 0.077887 0.140096 0.107927 0.064905 0.122892 0.093041 0.054088 0.107800 0.080207 0.045073 0.094561 0.069144 0.037561 0.082948 0.059607 0.031301 0.072762 0.051385 0.026084 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 1 2 n 4% 0.961538 1.886095 3 2.775091 4 3.629895 5 4.451822 6 5.242137 6.002055 8 6.732745 9 7.435332 10 8.110896 11 8.760477 12 9.385074 13 9.985648 14 10.563123 15 11.118387 16 11.652296 17 12.165669 18 12.659297 19 13.133939 20 13.590326 5% 0.952381 1.859410 2.723248 3.545951 4.329477 5.075692 5.786373 6.463213 7.107822 7.721735 8.306414 8.863252 9.393573 9.898641 10.379658 10.837770 11.274066 11.689587 12.085321 12.462210 6% 7% 8% 0.943396 0.934579 0.925926 1.833393 1.808018 1.783265 2.673012 2.624316 2.577097 3.465106 3.387211 3.312127 4.212364 4.100197 3.992710 4.917324 4.766540 4.622880 5.582381 5.389289 5.206370 6.209794 5.971299 5.746639 6.801692 6.515232 6.246888 7.360087 7023582 6.710081 7.886875 7.498674 7.138964 8.383844 7.942686 7.536078 8.852683 8.357651 7.903776 9.294984 8.745468 8.244237 9.712249 9.107914 8.559479 10.105895 9.446649 8.851369 10.477260 9.763223 9.121638 10.827603 10.059087 9.371887 11.158116 10.335595 9.603599 11.469921 10.594014 9.818147 9% 10% 12% 14% 16% 20% 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 1.759111 1.735537 1.690051 1.646661 1.605232 1.527778 2.531295 2.486852 2.401831 2.321632 2.245890 2106481 3.239720 3.169865 3.037349 2.913712 2.798181 2.588735 3.889651 3.790787 3.604776 3.433081 3.274294 2.990612 4.485919 4.355261 4.111407 3.888668 3.684736 3.325510 5.032953 4.868419 4.563757 4.288305 4,038565 3,604592 5.534819 5.334926 4.967640 4.638864 4.343591 3.837160 5.995247 5.759024 5.328250 4.946372 4.606544 4030967 6.417658 6.144567 5.650223 5.216116 4.833227 4.192472 6.805191 6.495061 5.937699 5.452733 5.028644 4.327060 7.160725 6.813692 6.194374 5.660292 5.197107 4.439217 7.486904 7103356 6.423548 5.842362 5.342334 4.532681 7.786150 7.366687 6.628168 6.002072 5.467529 4.610567 8.060688 7606080 6.810864 6.142168 5.575456 4.675473 8.312558 7.823709 6.973986 6.265060 5.668497 4.729561 8.543631 8.021553 7.119630 6.372859 5.748704 4.774634 8.755625 8.201412 7.249670 6.467420 5.817848 4.812195 8.905115 8.364920 7.365777 6.550369 5.877455 4.843496 9.128546 8.513564 7.469444 6.623131 5.928841 4.869580