Recommended Group Activity

1.You have a business that requires the replacement of two 50,000-BTU heating units. Compare the total costs of these units from three manufacturers. Assume that the heaters will be placed in use and will last 10 years. Which company provides heaters with the lowest total cost?

2.Your group receives a phone proposal to invest in a new business. The caller informs you that it will take a $70,000 down payment and the investment will return $10,000 a year for the next 10 years. He tells you that the investment will return 14 percent. If current interest rates are 8 percent, what is the present value of this investment? How did the caller get 14 percent?