NPV and ANPV decisionsPersonal Finance Problem Richard and Linda Butler decide that it is time to purchase a high-definition (HD) television because the technology has improved and prices have fallen over the past 3 years. From their research, they narrow their choices to two sets, the Samsung 64-inch plasma with 1080p capability and the Sony 64-inch plasma with 1080p features. The price of the Samsung is

$2 comma 3202,320

and the Sony will cost

$2 comma 7102,710.

They expect to keep the Samsung for 3 years; if they buy the more expensive Sony unit, they will keep the Sony for 4 years. They expect sell the Samsung for

$425425

by the end of 3 years; they expect to sell the Sony for

$340340

at the end of the year 4. Richard and Linda estimate that the end-of-year entertainment benefits (i.e., not going to movies or events and watching at home) from the Samsung to be

$950950

and for the Sony to be

$1 comma 0501,050.

Both sets can be viewed as quality units and are equally risky purchases. They estimate their opportunity cost to be

8.9 %8.9%.

The Butlers wish to choose the better alternative from a purely financial perspective. To perform this analysis they wish to do the following:

a. Determine the NPV of the Samsung HD plasma TV.

b. Determine the ANPV of the Samsung HD plasma TV.

c. Determine the NPV of the Sony HD plasma TV.

d. Determine the ANPV of the Sony HD plasma TV.

e. Which set should the Butlers purchase and why?

Seve Homework: Chapter 11 Homework Score: 0 of 1 pt P11-31 (similar to) 15 of 16 17 complete HW Score: 29.69%, 4.75 of 16 pts Question Help NPV and ANPV decisions Personal Finance Problem Richard and Linda Butler decide that is time to purchase a high-definition HD vion because the technology has improved and prices have fallen over the past 3 years. From the research, they arrow their choices to two sets the Samsung 64ch plasma with 1080p capability and the Sony 64 inch plasma with 1080p f ures. The price of the Samsung is 52,320 and the Sony will cost $2.710. They expect to keep the Samsung for 3 years they buy the more expensive Sery unit, they will keep the Sony for 4 years. They expect sel the Samsung for $425 by the end of 3 years, they expect to sell the Sony for $340 at the end of the year 4. Richard and Linda t a ithe end-of-year ortiment ben e , not going to movies or events and w ing nome) from the Samsung to be $950 and for the Sony to be $1.050. Both can be viewed as quai unts and are equally risky purch . They stimate their opportunity costo be 89% The Blues with choose a Bormale from a purely financial perspective To perform this analysis Pey wish to do the following: a. Determine the NPV of the Samsung HD plasma TV Determine the ANPV of the Samsung HD plasma TV setermine the NPV of the Sony HD me TV d Determine the ANPY of the Sony HD ima TV e. Which set should the Butlers purchase and why? The NPV of the Samsung HD LCD Round to the nearest con Enter your answer in the answer box and then click Check Answer 4 semaining Clear Check