Reviewing, GMC is considering expanding to both market and develop a new technology over the next 15 years (at which time they feel the technology will be largely obsolete). They are considering two possible expansions: Bot Apps which they feel they can start expanding right away or Machine Learning which they can start only after five years. In each case they are willing to invest $1.8M over the next 15 years. They do think that the Machine Learning technology has far greater potential for growth, but this is balanced by having to wait to begin the expansion for another five years.

• On the one hand, they can start developing Bot Apps right away, tomorrow if they wanted.
  • This technology’s value to GMC can be viewed as an annuity with an investment of $10,000 per month and a 1.5% interest rate per month (i.e. 18% annual interest rate) for a total of 15 years.
• Or, they can develop Machine Learning Apps starting 5 years from now when we are ready.
  • This technology’s value to GMC can be viewed as an annuity with an investment of $15,000 per month and a 1.7% interest rate per month (i.e. 20.4% annual interest rate) for a total of only 10 years.

• including any needed charts and graphs,

  GMC would like the following:

• What will each investment’s value be in 15 years?
• With an EXCEL chart, show the growth of the values of both investments over the next 15 years. (Note: The value of the Machine Learning Apps option will be $0 for the first 5 years)
• Which option is in the best interest for GMC, regarding the long term value of these technologies for GMC? Remember to explain your reasoning in terms non-mathematical people will understand.