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PROBLEM 6 A small company is considering investing in a transportation project that would decrease traffic congestion and accidents in a city. The company is

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PROBLEM 6 A small company is considering investing in a transportation project that would decrease traffic congestion and accidents in a city. The company is required to deposit $45,000 now. After this initial deposit, the company will receive $3800 for each year of investment. Besides, the company can choose one of the following options. Option 1: Retain the investment for 5 years and receive a lump-sum amount of $32,000 at the end of year 5. Option 2: Retain the investment for 10 years and receive a lump-sum amount of $57,000 at the end of year 10. Option 3: Retain the investment for 15 years and receive a lump-sum amount of $65,000 at the end of year 15. The current rate of return is 10% per year. a) Is the decision sensitive to the investment retention period? b) If your answer to part a) is YES, which one would be the best investment option

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