Question: INSTEAD OF CALCULATING THE PRESENT VALUES PLEASE CALCULATE FUTURE VALUES. THANK YOU!!! Problem Number 2 John Thomas wants to select one of the following: Alternative
INSTEAD OF CALCULATING THE PRESENT VALUES PLEASE CALCULATE FUTURE VALUES. THANK YOU!!!
Problem Number 2 John Thomas wants to select one of the following: Alternative A: Build a Fast-Food Restaurant Alternative B: Build a Gas Station Do Nothing First Cost $900,000 $1,300,000 0 Annual Property Taxes $40,000 $55,000 0 Annual Expenses $70,000 $95,000 0 Annual Income $155,000 $210,000 0 Resale Value $460,000 $650,000 0 Interest rate = 10% N=20 years. (a) Draw the cashflow diagram for Alternative B. (b) By using the future worth method and calculating the present values of the two considered projects recommend the correct economic decision to John
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