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PLEASE PROVIDE CASH FLOW DIAGRAMS. Three different plans were presented to the GAO (General Accounting Office) by a high-tech facili- ties manager for operating a
PLEASE PROVIDE CASH FLOW DIAGRAMS.
Three different plans were presented to the GAO (General Accounting Office) by a high-tech facili- ties manager for operating a portable cyber-secu- rity facility Plan A: Renewable 1-year contracts with payments of $1 mion at the beginning of each year Plan B: A 2-year contract that requires three pay- ments of $600,000 each, with the first one to be made immediately and the second made at the beginning of the following two 6-month intervals; no payments required during the second year and third payment of the contract. Plan C: A 3-year contract that entails a payment of $1.5 million now and another payment of S0.5 million 2 years from now Assuming the GAO can renew any of the plans under the same conditions, if it decides to do so hich plan is best on the basis of a present worth analysis at an interest rate of 6% per year, com- pounded semiannually? Solve using (a) factors and (b) a spreadsheet. (Hint: Construct a cash flow dia- gram before working this problem.)Step by Step Solution
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