New Pharm Corporation is a rapidly growing biotech company that has a required rate of return of 6%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete. The building contractor offered New Pharm a choice of three payment plans, as follows: 1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Pharm. (Round your final answers to the nearest whole dollar.) 1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Pharm. 2. Which payment plan should New Pharm choose? Explain. 3. Discuss the financial factors, other than the cost of the plan, and the nonfinancial factors that should be considered in selecting an appropriate payment plan. Compound Amount of $1.00 (The Future Value of $1.00) S = P(1 + r)^a. In this table P = $1.00 Present Value of $1.00 P = S/(1 + r)^n. In this table S = $1.00. Compound Amount of Annuity of $1.00 in Arrears* (Future Value of Annuity) S_n = (1 + r)^n - 1/r Present Value of Annuity $1.00 in Arrears* P_n = 1/r [1 - 1/(1 + r)^n] New Pharm Corporation is a rapidly growing biotech company that has a required rate of return of 6%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete. The building contractor offered New Pharm a choice of three payment plans, as follows: 1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Pharm. (Round your final answers to the nearest whole dollar.) 1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Pharm. 2. Which payment plan should New Pharm choose? Explain. 3. Discuss the financial factors, other than the cost of the plan, and the nonfinancial factors that should be considered in selecting an appropriate payment plan. Compound Amount of $1.00 (The Future Value of $1.00) S = P(1 + r)^a. In this table P = $1.00 Present Value of $1.00 P = S/(1 + r)^n. In this table S = $1.00. Compound Amount of Annuity of $1.00 in Arrears* (Future Value of Annuity) S_n = (1 + r)^n - 1/r Present Value of Annuity $1.00 in Arrears* P_n = 1/r [1 - 1/(1 + r)^n]