PROBLEM #1 a) $2,500 has been invested in a small business. The income from the investment at the end of one year is $12,500. What would the rate of return be after one year? b) $11, 500 was expended on aggressive expansion in the second year. What is the rate of return equation using a classic present worth method? How many solutions does the equation have? c) Solve for at least one ROR value at the end of year 2 d) Write the composite rate of return relation and solve if the reinvestment rate is 308. PROBLEM #2 The one best alternative must be chosen for a project. The initial project starting costs are shown below. The company's MARR is 10%. Using a ten year study period, determine which proposal should be selected by a) the PW method, b) the EUAW method, and c) the incremental rate-of-return method. Be sure to start with the lowest cost alternative vs. the "Do-nothing" alternative. Project Proposal Alternatives $33, 000 $22,000 $51,000 46,000 20,000 $15,000 $27,000 $22,000 Start-up costs $28,000 Annual income $18, 000 PROBLEM #1 a) $2,500 has been invested in a small business. The income from the investment at the end of one year is $12,500. What would the rate of return be after one year? b) $11, 500 was expended on aggressive expansion in the second year. What is the rate of return equation using a classic present worth method? How many solutions does the equation have? c) Solve for at least one ROR value at the end of year 2 d) Write the composite rate of return relation and solve if the reinvestment rate is 308. PROBLEM #2 The one best alternative must be chosen for a project. The initial project starting costs are shown below. The company's MARR is 10%. Using a ten year study period, determine which proposal should be selected by a) the PW method, b) the EUAW method, and c) the incremental rate-of-return method. Be sure to start with the lowest cost alternative vs. the "Do-nothing" alternative. Project Proposal Alternatives $33, 000 $22,000 $51,000 46,000 20,000 $15,000 $27,000 $22,000 Start-up costs $28,000 Annual income $18, 000