Please answer as much as you can, thank you!

a. Rank these financing options in order of attractiveness using the TWO valuation methods: (1) Internal Rate of Return (IRR), and (2) Net Present Value (NPV). (Hint: Think about handling interest rates with different compounding frequency, fees, and down payments).

b. Imagine your investment account now pays 7% p.a., 5% p.a., 3% p.a., or 0% p.a. (all compounded weekly). Does your final decision change? Provide the rankings in each of the scenarios accordingly and discuss briefly why or why not your final decision will change. The discussion should not be more than 50 words.

c. Based on your ranking of the three alternatives and decisions, discuss the most viable financial arrangement for you. NOTE: Your ranking should include a discussion of the valuation methods. You should also explain why you chose a particular method. The discussion should not be more than 50 words.

d. Consider the off-the-plan purchase. Compare to the fixed rate mortgage option, which one do you prefer?

Facts: You have just secured your first job since you graduated from RPI 3 months ago. The housing market is pretty good and you decide to jump in now. Since you are a fresh graduate, you do not want to spend too much on your fist property. You have you eyes on an established luxury one bedroom plus study apartment in Troy, priced approximately $475,000. Your training has prepared you well for life after graduation and you are going to use your knowledge from Financial Management to assess different finance options as shown in below: Fixed-rate Mortgage option offers you a deal with ABC Bank for a mortgage with a down payment of $95,000 paid on the day of purchase of the apartment and the balance is financed by a 5% p.a. fixed interest (compounded monthly) home loan with a term of 30 years with monthly payments (irst payment paid one month after you buy your apartment) This offer includes $3,000 in loan set up fees that must be paid in cash on the date of urchase. Floating-rate Mortgage Option offers you a deal with ABC Bank for a mortgage with a down payment of $100,000 paid on the day of purchase of the apartment) and the balance financed by a 4.5%p.a. fixed interest (compounded quarterly) mortgage with a term of 20 years with quarterly payments (first payment is paid on the day of purchase of the apartment). Unfortunately, this fixed interest rate will last only two years and then the rate will be variable for the remainder of the mortgage. ABC Bank estimate the variable rate will be 5.5% at the beginning of year 3. For the purpose of your calculation this variable rate is assumed to remain constant over the remaining life of the mortgage. Application fees for this loan are $2,000, which must be paid in cash on the date of purchase. Interest only option: Since you just got your first job and you do not want to spend most of your income on repaying the mortgage. The ABC Bank agrees to offer you an interest only option. In which case you will be only paying interest in the first five years, after that you will be paying interest and the principle for the rest 25 years. The interest rate is fixed at 5% p.a. comm monthly) for this mortgage option. pounded