Question: Please solve this using an Excel Spreadsheet (that's what it asks for in the question) 1. You are asked to choose the more profitable alternative

 Please solve this using an Excel Spreadsheet (that's what it asks

for in the question) 1. You are asked to choose the more

Please solve this using an Excel Spreadsheet (that's what it asks for in the question) 1. You are asked to choose the more profitable alternative from the two options shown in the table below. Option A requires an initial investment of $100,000 while Option B requires an initial investment of $200,000. a. Please use a spreadsheet to show the present value of the cost annual cost and benefit flows for each option. - 10 pts b. Use the Net Present Value to determine the preferred option? - 5 pts c. Use the ratio of Net Present Value of the Annual Benefits to Net Present Value of the Annual Costs to select the preferred option? - 5 pts d. Use the NPV of the preferred option to calculate the expected uniform monthly dividend payment for the life of the project to the person who invests in that option, assuming the annual interest rate is 5% compounded monthly. - 10 pts Year, t Bt 40000 [PF.1.t 0.9524 0.907 0.8638 0.8227 0.7835 Option A Ct -10,000 -10,000 -10,000 -10,000 -10,000 40000 40000 40000 40000 Opton B Ct -20,000 -20,000 -20,000 -20,000 -20,000 Bt 80,000 80,000 80,000 80,000 80,000 Please solve this using an Excel Spreadsheet (that's what it asks for in the question) 1. You are asked to choose the more profitable alternative from the two options shown in the table below. Option A requires an initial investment of $100,000 while Option B requires an initial investment of $200,000. a. Please use a spreadsheet to show the present value of the cost annual cost and benefit flows for each option. - 10 pts b. Use the Net Present Value to determine the preferred option? - 5 pts c. Use the ratio of Net Present Value of the Annual Benefits to Net Present Value of the Annual Costs to select the preferred option? - 5 pts d. Use the NPV of the preferred option to calculate the expected uniform monthly dividend payment for the life of the project to the person who invests in that option, assuming the annual interest rate is 5% compounded monthly. - 10 pts Year, t Bt 40000 [PF.1.t 0.9524 0.907 0.8638 0.8227 0.7835 Option A Ct -10,000 -10,000 -10,000 -10,000 -10,000 40000 40000 40000 40000 Opton B Ct -20,000 -20,000 -20,000 -20,000 -20,000 Bt 80,000 80,000 80,000 80,000 80,000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!