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please help me on this one! NPV and ANPV decisions Personal Finance Problem Richard and Linda Butler docide that it is bime to purchase a
please help me on this one!
NPV and ANPV decisions Personal Finance Problem Richard and Linda Butler docide that it is bime to purchase a high-definition (HD) television because the tochnology has improved and prices have fallon over the past 3 years. From their research, they narrow their choices to two sets, the Samsung 64 -inch plasma with 1080 p elpability and the Sony G4inch platima with 1060 p features. The price of the Samsung is $2,350 and the Sony will cost \$2,735. They expect to keep the Samsung for 3 years; if they buy the more expensive Sony unit, they will keop the Sony for 4 year. They expect sell the Sensung for $375 by the ond of 3 yoars, they oxpect to sect the Sony for $350 at the end of the year 4 , Rlechard and Linds estemate that the end-of-year entertainment benefits (.e. not going to movies or events and watching at home) trom the Samsung to be $920 and for tho Seny to be s995. Both sets can be vieved as qualty unts and are equaly risky purchases. They estimate their opportunity cost to be 9.1%. The Butlers wish to choose the besor altemativo from a purely financial porspective. To pertorm this andysis they wish to do the following: a. Determine the NPV of the Samsung HD plasma TV. b. Dotermine the ANPY of the Samsung HO plasma TV. c. Determine the NPV of the Sony HD plasme TV. d. Determine the ANPV of the Sony HD plasma TV 6. Which set should the Butiers purchase and why Step by Step Solution
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