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You have two investment opportunities (Which are NOT mutually exclusive): (A) Make a single investment of $1,000,000 now, and receive a $200,000 year-end payment each
You have two investment opportunities (Which are NOT mutually exclusive): (A) Make a single investment of $1,000,000 now, and receive a $200,000 year-end payment each year for the next 10 years with no salvage value. (B) Make a single investment of $1,500,000 now, and receive a single payment of $3,000,000 at the end of the tenth year. If the MARR is 15%, what are the present worth values of A and B (within 1%)? What should you do? O PW A plus $3750, PW B = plus $758,450. Invest in both A and B. %3D %3D O PW A = plus $3750, PW B = minus $75,840. Invest in A only. PW A = plus $3750, PW B = minus $758,450. Invest in A only. PW A = plus $3500, PW B = plus $75,840. Invest in both A and B. Both present worths are negative. Do not invest in either one
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