Question: Please have ONE group member to only submit ONE Excel solution per group. If your group members are: Adam Smith, George Washington, Michael Jordan, please
Please have ONE group member to only submit ONE Excel solution per group. If your group members are: Adam Smith, George Washington, Michael Jordan, please name your Excel file as Smith Washington Jordan Question# 1 You have just received a S15,000 signing bonus from your new employer and decide to invest it for 2 years. Your banker suggests two alternatives, both of which require a commitment for the full 2 years. The first alternative will earn 8% per year for both years. The second alternative earns 6% for the first year and 10% for the second year. Interest compounds annually. Which alternative should you choose? Question#2 You are trying to decide whether to lease a car for 4 years or buy a new car now and sel it for 4 years later. The annual lease payment would be $6,300 with payments made at the beginning of each year. The new car price is S47,000now. Four years later, you are expected to sell the car for $33,000. The appropriate discount rate for this project is 7.2%. Should you buy or lease? Use the present value of cost comparison method Question#3 Your firm is considering two mutually exclusive projects with cash flows as indicated in the Excel file. A) What is the NPV and IRR for the two projects, respectively? B) Calculate the crossover rate
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