New Tech Corporation is a rapidly growing biotech company that has a required rate of return of 10%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete. The building contractor offered. New Tech a choice of three payment plans, as follows:
.
1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Tech.
(Round your final answers to the nearest whole dollar.)
The net present value cost of Plan I is .
The net present value cost of Plan II is
The net present value cost of Plan III is

2. Which payment plan should New Tech choose? Explain.

3. Discuss the financial factors, other than the cost of the plan, and the nonfinancial factors that should be considered in selecting an appropriate payment plan

More info

•

Plan I: Payment of $225,000 at the time of signing the contract and $4,800,000

upon completion of the building. The end of the second year is the completion date.

•

Plan II: Payment of $1,800,000 at the time of signing the contract and $1,800,000

at the end of each of the 2 succeeding years.

•

Plan III: Payment of $250,000 at the time of signing the contract and $1,500,000

at the end of each of the 3 succeeding years

Transcribed Image Text:Present Value of Annuity of $1.00 in Arrears* Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% Periods Period 1 0.980 0.062 0.943 0.926 0.000 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.704 0.781 0.769 0.758 0.714 Period 1 Period 2 1.942 1.886 1.833 1.783 1.736 1.600 1.647 1.605 1.566 1.528 1.492 1.457 1.424 1.392 1.361 1.331 1.224 Period 2 Period 3 2.884 2.775 2.042 1.868 2.673 3.465 2.577 2.487 2.402 2.322 2.246 2.174 2.108 1.981 1.923 1.816 1.766 1.589 Period 3 Period 4 3.808 3.630 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.494 2.404 2.320 2.241 2.166 2.096 1.849 Period 4 Period 5 4.713 4.452 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.901 2.884 2.745 2.635 2.035 2.532 2.759 2.436 2.345 Period 5 Period 6 5.601 5.242 4.017 4.623 4.355 4.111 3.889 3.685 3.498 3.326 3.167 3.020 2.885 2.643 2.534 2.168 Period 6 Period 7 6.472 6.002 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.418 3.242 3.083 2.937 2.802 2.677 2.263 Period 7 Period 8 7.325 6.733 6.210 5.747 5.335 4.908 4.639 4.344 4.078 3.837 3.610 3.421 3.241 3.076 2.925 2.786 2.331 Period 8 Period 9 8.162 7.435 6.802 6.247 5.759 5.328 3.566 2.379 4.948 5.210 4.607 4.303 4.031 3.786 3.366 3.184 3.019 2.868 Period 9 5.650 5.038 Period 10 8.083 7.360 4.833 4.192 4.327 8.111 6.710 6.145 4.494 3.923 3.682 3.465 3.269 3.092 2.930 2.414 Period 10 Period 11 9.787 8.760 7.887 7.139 6.495 5.453 5.029 4.656 4.035 3.776 3.543 3.335 3.147 2.978 2.438 Period 11 Period 12 10.575 9.385 8.384 7.536 6.814 6.194 5.680 5.197 4.793 4.439 4.127 3.851 3.606 3.387 3.190 3.013 2.456 Period 12 Period 13 11.348 9.086 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.203 3.012 3.656 3.427 3.223 3.040 2.469 Period 13 Period 14 12.106 10.563 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 4.265 3.962 3.695 3.459 3.249 3.061 2.478 Period 14 Period 15 12.849 11.118 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 4.315 4.357 4.001 3.726 3.483 3.268 3.076 2.484 Period 15 Period 16 13.578 11.652 10.108 8.851 7.824 6.974 6.265 5.668 5.162 4.730 4.033 3.751 3.503 3.283 3.088 2.489 Period 16 Period 17 14.292 12.166 10.477 9.122 8.022 7.120 6.373 5.749 5.222 4.775 4.391 4.059 3.771 3.097 3.518 3.529 3.295 2.492 Period 17 Period 18 14.992 12.659 10.828 9.372 8.201 7.250 6.487 5.818 5.273 4.812 4.419 4.080 3.786 3.304 3.104 2.494 Period 18 Period 19 15.678 13.134 11.158 9.604 8.365 7.366 6.550 5.877 5.316 4.843 4.442 4.097 3.799 3.539 3.311 3.109 2.496 Period 19 Period 20 18.351 13.590 11.470 9.818 8.514 7.489 6.623 5.929 5.353 4.870 4.460 4.110 3.808 3.546 3.318 3.113 2.497 Period 20 Period 21 17.011 14.029 11.764 10.017 8.649 7.562 6.687 5.973 5.384 4.801 3.551 4.476 4.488 4.121 3.816 3.320 3.118 2.498 Period 21 Period 22 17.658 14.451 12.042 10.201 8.772 7.645 6.743 6.011 5.410 4.909 4.130 3.822 3.556 3.323 3.118 2.498 Period 22 Period 23 18.292 14.857 12.303 10.371 8.883 7.718 6.792 6.044 5.432 4.925 4.499 4.137 3.827 3.550 3.325 3.120 2.499 Period 23 Period 24 18.914 15.247 12.550 10.529 8.985 7.784 6.835 6.073 5.451 4.937 4.507 4.143 3.831 3.562 3.327 3.329 3.121 2.499 Period 24 Period 25 19.523 15.622 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 4.514 4.147 3.834 3.564 3.122 2.499 Period 25 Period 26 20.121 15.083 13.003 10.810 9.161 7.896 6.906 6.118 4.151 5.480 5.492 4.056 4.520 3.837 3.566 3.330 3.123 2.500 Period 26 Period 27 20.707 16.330 13.211 10.935 9.237 7.943 6.935 6.136 4.964 4.524 4.154 3.839 3.567 3.331 3.123 2.500 Period 27 Period 28 21.281 18.603 13.406 11.051 9.307 7.984 6.961 6.152 5.502 4.970 4.528 4.157 3.840 3.568 3.331 3.124 2.500 Period 28 8.022 6.083 7.003 Period 29 21.844 16.984 13.591 11.158 9.370 6.166 5.510 4.975 4.531 4.159 3.841 3.569 3.332 3.124 2.500 Period 29 Period 30 22.398 17.292 13.765 11.258 9.427 8.055 6.177 5.517 4.979 4.534 4.160 3.842 3.569 3.332 3.124 2.500 Period 30 Period 35 24.999 18.605 14.498 11.655 9.644 8.176 7.070 6.215 5.539 4.992 4.541 4.164 3.845 3.571 3.333 3.125 2.500 Period 35 Period 40 27.355 19.793 15.046 11.925 9.779 8.244 7.105 6.233 5.548 4.997 4.544 4.166 3.848 3.571 3.333 3.125 2.500 Period 40
Transcribed Image Text:Reference Present Value of $1 Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% Periods Period 1 0.980 0.062 0.043 0.026 0.900 0.893 0.877 0.862 0.847 0.833 0.820 0.808 0.794 0.781 0.769 0.758 0.714 Period 1 Period 2 0.961 0.925 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.604 0.672 0.650 0.630 0.610 0.592 0.574 0.510 Period 2 Period 3 0.942 0.889 0.840 0.704 0.751 0.712 0.675 0.641 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.435 0.364 Period 3 Period 4 0.924 0.855 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.451 0.423 0.397 0.373 0.350 0.329 0.260 Period 4 Period 5 0.908 0.822 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.370 0.341 0.315 0.201 0.269 0.250 0.186 Period 5 0.705 0.456 0.227 0.178 Period 6 0.888 0.790 0.630 0.564 0.507 0.410 0.370 0.335 0.303 0.275 0.250 0.207 0.189 0.133 Period 6 Period 7 0.871 0.760 0.665 0.583 0.513 0.452 0.404 0.400 0.354 0.314 0.279 0.249 0.222 0.198 0.159 0.143 0.095 Period 7 Period 8 0.853 0.731 0.627 0.540 0.467 0.351 0.305 0.266 0.233 0.204 0.179 0.157 0.139 0.123 0.108 0.068 Period 8 Period 9 0.837 0.703 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.167 0.144 0.125 0.108 0.094 0.082 0.048 Period 9 Period 10 0.820 0.676 0.463 0.191 0.062 0.558 0.527 0.407 0.386 0.322 0.270 0.227 0.182 0.137 0.116 0.090 0.085 0.073 0.035 Period 10 0.135 0.112 Period 11 0.804 0.650 0.429 0.350 0.287 0.237 0.195 0.162 0.112 0.094 0.079 0.000 0.050 0.047 0.025 Period 11 Period 12 0.788 0.625 0.397 0.319 0.257 0.208 0.168 0.137 0.092 0.076 0.062 0.052 0.043 0.036 0.018 Period 12 Period 13 0.773 0.601 0.409 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.075 0.061 0.050 0.040 0.033 0.027 0.013 Period 13 Period 14 0.758 0.577 0.442 0.340 0.263 0.205 0.160 0.125 0.000 0.084 0.071 0.078 0.062 0.049 0.039 0.032 0.025 0.025 0.020 0.021 0.009 Period 14 Period 15 0.743 0.555 0.417 0.315 0.239 0.183 0.140 0.108 0.085 0.051 0.040 0.031 0.018 0.006 Period 15 Period 16 0.728 0.534 0.394 0.292 0.218 0.163 0.123 0.003 0.054 0.042 0.032 0.025 0.019 0.015 0.012 0.005 Period 16 0.020 0.016 Period 17 0.714 0.513 0.371 0.270 0.198 0.148 0.108 0.080 0.060 0.045 0.034 0.026 0.015 0.012 0.009 0.003 Period 17 Period 18 0.700 0.494 0.350 0.250 0.180 0.130 0.095 0.069 0.051 0.038 0.028 0.021 0.012 0.009 0.007 0.002 Period 18 Period 19 0.686 0.475 0.331 0.232 0.184 0.118 0.083 0.060 0.043 0.031 0.023 0.017 0.012 0.009 0.007 0.005 0.002 Period 19 0.312 0.215 0.294 0.190 Period 20 0.673 0.456 0.140 0.104 0.073 0.051 0.037 0.028 0.019 0.014 0.010 0.007 0.005 0.004 0.001 Period 20 Period 21 0.660 0.439 0.135 0.093 0.083 0.084 0.056 0.044 0.031 0.022 0.015 0.011 0.008 0.006 0.004 0.003 0.001 Period 21 Period 22 0.647 0.422 0.278 0.184 0.123 0.038 0.026 0.018 0.013 0.000 0.006 0.004 0.003 0.002 0.001 Period 22 Period 23 0.634 0.406 0.262 0.170 0.112 0.074 0.049 0.033 0.022 0.015 0.010 0.007 0.005 0.003 0.002 0.002 0.000 Period 23 Period 24 0.622 0.390 0.247 0.158 0.102 0.086 0.043 0.028 0.019 0.013 0.008 0.006 0.004 0.003 0.002 0.001 0.000 Period 24 Period 25 0.610 0.375 0.233 0.148 0.092 0.059 0.038 0.024 0.016 0.010 0.007 0.005 0.003 0.002 0.001 0.001 0.000 Period 25 Period 26 0.598 0.361 0.220 0.135 0.084 0.053 0.033 0.021 0.014 0.000 0.006 0.004 0.002 0.002 0.001 0.001 0.000 Period 26 Period 27 0.586 0.347 0.207 0.125 0.076 0.047 0.020 0.018 0.011 0.007 0.005 0.003 0.002 0.001 0.001 0.001 0.000 Period 27 Period 28 0.574 0.333 0.196 0.116 0.069 0.042 0.026 0.016 0.010 0.006 0.004 0.002 0.002 0.001 0.001 0.000 0.000 Period 28 Period 29 0.563 0.321 0.185 0.107 0.083 0.037 0.022 0.014 0.008 0.005 0.003 0.002 0.001 0.001 0.000 0.000 0.000 Period 29 Period 30 0.552 0.308 0.174 0.009 0.057 0.033 0.020 0.012 0.007 0.004 0.003 0.002 0.001 0.001 0.000 0.000 0.000 Period 30 Period 35 0.500 0.253 0.130 0.068 0.036 0.019 0.010 0.006 0.003 0.002 0.001 0.001 0.000 0.000 0.000 0.000 0.000 Period 35 Period 40 0.453 0.208 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Period 40 Print Done

Question

New Tech Corporation is a rapidly growing biotech company that has a required rate of return of 10%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete. The building contractor offered. New Tech a choice of three payment plans, as follows:
.
1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Tech.
(Round your final answers to the nearest whole dollar.)
The net present value cost of Plan I is .
The net present value cost of Plan II is
The net present value cost of Plan III is

2. Which payment plan should New Tech choose? Explain.

3. Discuss the financial factors, other than the cost of the plan, and the nonfinancial factors that should be considered in selecting an appropriate payment plan

More info

•	Plan I: Payment of $225,000 at the time of signing the contract and $4,800,000 upon completion of the building. The end of the second year is the completion date.

•	Plan II: Payment of $1,800,000 at the time of signing the contract and $1,800,000 at the end of each of the 2 succeeding years.
•	Plan III: Payment of $250,000 at the time of signing the contract and $1,500,000 at the end of each of the 3 succeeding years

Present Value of Annuity of $1.00 in Arrears*
Periods
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
40%
Periods
Period 1
0.980
0.062
0.943
0.926
0.000
0.893
0.877
0.862
0.847
0.833
0.820
0.806
0.704
0.781
0.769
0.758
0.714
Period 1
Period 2
1.942
1.886
1.833
1.783
1.736
1.600
1.647
1.605
1.566
1.528
1.492
1.457
1.424
1.392
1.361
1.331
1.224
Period 2
Period 3 2.884
2.775
2.042
1.868
2.673
3.465
2.577
2.487
2.402
2.322
2.246
2.174
2.108
1.981
1.923
1.816
1.766
1.589
Period 3
Period 4
3.808
3.630
3.312
3.170
3.037
2.914
2.798
2.690
2.589
2.494
2.404
2.320
2.241
2.166
2.096
1.849
Period 4
Period 5
4.713
4.452
4.212
3.993
3.791
3.605
3.433
3.274
3.127
2.901
2.884
2.745
2.635
2.035
2.532
2.759
2.436
2.345
Period 5
Period 6 5.601
5.242
4.017
4.623
4.355
4.111
3.889
3.685
3.498
3.326
3.167
3.020
2.885
2.643
2.534
2.168
Period 6
Period 7 6.472
6.002
5.582
5.206
4.868
4.564
4.288
4.039
3.812
3.605
3.418
3.242
3.083
2.937
2.802
2.677
2.263
Period 7
Period 8 7.325
6.733
6.210
5.747
5.335
4.908
4.639
4.344
4.078
3.837
3.610
3.421
3.241
3.076
2.925
2.786
2.331
Period 8
Period 9
8.162
7.435
6.802
6.247
5.759
5.328
3.566
2.379
4.948
5.210
4.607
4.303
4.031
3.786
3.366
3.184
3.019
2.868
Period 9
5.650
5.038
Period 10 8.083
7.360
4.833
4.192
4.327
8.111
6.710
6.145
4.494
3.923
3.682
3.465
3.269
3.092
2.930
2.414 Period 10
Period 11 9.787
8.760
7.887
7.139
6.495
5.453
5.029
4.656
4.035
3.776
3.543
3.335
3.147
2.978
2.438 Period 11
Period 12 10.575
9.385
8.384
7.536
6.814
6.194
5.680
5.197
4.793
4.439
4.127
3.851
3.606
3.387
3.190
3.013
2.456 Period 12
Period 13 11.348
9.086
8.853
7.904
7.103
6.424
5.842
5.342
4.910
4.533
4.203
3.012
3.656
3.427
3.223
3.040
2.469 Period 13
Period 14 12.106 10.563
9.295
8.244
7.367
6.628
6.002
5.468
5.008
4.611
4.265
3.962
3.695
3.459
3.249
3.061
2.478 Period 14
Period 15 12.849
11.118
9.712
8.559
7.606
6.811
6.142
5.575
5.092
4.675
4.315
4.357
4.001
3.726
3.483
3.268
3.076
2.484 Period 15
Period 16 13.578 11.652
10.108
8.851
7.824
6.974
6.265
5.668
5.162
4.730
4.033
3.751
3.503
3.283
3.088
2.489 Period 16
Period 17 14.292 12.166
10.477
9.122
8.022
7.120
6.373
5.749
5.222
4.775
4.391
4.059
3.771
3.097
3.518
3.529
3.295
2.492 Period 17
Period 18 14.992 12.659
10.828
9.372
8.201
7.250
6.487
5.818
5.273
4.812
4.419
4.080
3.786
3.304
3.104
2.494
Period 18
Period 19 15.678 13.134
11.158
9.604
8.365
7.366
6.550
5.877
5.316
4.843
4.442
4.097
3.799
3.539
3.311
3.109
2.496 Period 19
Period 20 18.351 13.590
11.470
9.818
8.514
7.489
6.623
5.929
5.353
4.870
4.460
4.110
3.808
3.546
3.318
3.113
2.497 Period 20
Period 21 17.011 14.029
11.764
10.017
8.649
7.562
6.687
5.973
5.384
4.801
3.551
4.476
4.488
4.121
3.816
3.320
3.118
2.498 Period 21
Period 22 17.658 14.451
12.042
10.201
8.772
7.645
6.743
6.011
5.410
4.909
4.130
3.822
3.556
3.323
3.118
2.498 Period 22
Period 23 18.292 14.857
12.303
10.371
8.883
7.718
6.792
6.044
5.432
4.925
4.499
4.137
3.827
3.550
3.325
3.120
2.499
Period 23
Period 24 18.914 15.247
12.550
10.529
8.985
7.784
6.835
6.073
5.451
4.937
4.507
4.143
3.831
3.562
3.327
3.329
3.121
2.499 Period 24
Period 25 19.523 15.622
12.783
10.675
9.077
7.843
6.873
6.097
5.467
4.948
4.514
4.147
3.834
3.564
3.122
2.499 Period 25
Period 26 20.121 15.083
13.003
10.810
9.161
7.896
6.906
6.118
4.151
5.480
5.492
4.056
4.520
3.837
3.566
3.330
3.123
2.500 Period 26
Period 27 20.707 16.330
13.211
10.935
9.237
7.943
6.935
6.136
4.964
4.524
4.154
3.839
3.567
3.331
3.123
2.500 Period 27
Period 28 21.281 18.603
13.406
11.051
9.307
7.984
6.961
6.152
5.502
4.970
4.528
4.157
3.840
3.568
3.331
3.124
2.500 Period 28
8.022
6.083
7.003
Period 29 21.844 16.984
13.591
11.158
9.370
6.166
5.510
4.975
4.531
4.159
3.841
3.569
3.332
3.124
2.500 Period 29
Period 30 22.398 17.292
13.765
11.258
9.427
8.055
6.177
5.517
4.979
4.534
4.160
3.842
3.569
3.332
3.124
2.500 Period 30
Period 35 24.999 18.605
14.498
11.655
9.644
8.176
7.070
6.215
5.539
4.992
4.541
4.164
3.845
3.571
3.333
3.125
2.500 Period 35
Period 40 27.355 19.793
15.046
11.925
9.779
8.244
7.105
6.233
5.548
4.997
4.544
4.166
3.848
3.571
3.333
3.125
2.500 Period 40

Reference
Present Value of $1
Periods
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
40%
Periods
Period 1 0.980
0.062
0.043
0.026
0.900
0.893
0.877
0.862
0.847
0.833
0.820
0.808
0.794
0.781
0.769
0.758
0.714
Period 1
Period 2 0.961
0.925
0.890
0.857
0.826
0.797
0.769
0.743
0.718
0.604
0.672
0.650
0.630
0.610
0.592
0.574
0.510
Period 2
Period 3 0.942
0.889
0.840
0.704
0.751
0.712
0.675
0.641
0.609
0.579
0.551
0.524
0.500
0.477
0.455
0.435
0.364
Period 3
Period 4 0.924
0.855
0.792
0.735
0.683
0.636
0.592
0.552
0.516
0.482
0.451
0.423
0.397
0.373
0.350
0.329
0.260
Period 4
Period 5 0.908
0.822
0.747
0.681
0.621
0.567
0.519
0.476
0.437
0.402
0.370
0.341
0.315
0.201
0.269
0.250
0.186
Period 5
0.705
0.456
0.227
0.178
Period 6 0.888
0.790
0.630
0.564
0.507
0.410
0.370
0.335
0.303
0.275
0.250
0.207
0.189
0.133
Period 6
Period 7 0.871
0.760
0.665
0.583
0.513
0.452
0.404
0.400
0.354
0.314
0.279
0.249
0.222
0.198
0.159
0.143
0.095
Period 7
Period 8 0.853
0.731
0.627
0.540
0.467
0.351
0.305
0.266
0.233
0.204
0.179 0.157
0.139
0.123
0.108
0.068
Period 8
Period 9 0.837
0.703
0.592
0.500
0.424
0.361
0.308
0.263
0.225
0.194
0.167
0.144
0.125
0.108
0.094
0.082
0.048
Period 9
Period 10 0.820
0.676
0.463
0.191
0.062
0.558
0.527
0.407
0.386
0.322
0.270
0.227
0.182
0.137
0.116
0.090
0.085
0.073
0.035 Period 10
0.135
0.112
Period 11 0.804
0.650
0.429
0.350
0.287
0.237
0.195
0.162
0.112
0.094
0.079
0.000
0.050
0.047
0.025
Period 11
Period 12 0.788
0.625
0.397
0.319
0.257
0.208
0.168
0.137
0.092
0.076 0.062
0.052 0.043
0.036
0.018
Period 12
Period 13 0.773
0.601
0.409
0.368
0.290
0.229
0.182
0.145
0.116
0.093
0.075
0.061 0.050
0.040 0.033
0.027
0.013 Period 13
Period 14 0.758
0.577
0.442
0.340
0.263
0.205
0.160
0.125
0.000
0.084
0.071
0.078
0.062
0.049
0.039
0.032
0.025
0.025 0.020
0.021
0.009 Period 14
Period 15 0.743
0.555
0.417 0.315
0.239
0.183
0.140
0.108
0.085
0.051
0.040 0.031
0.018
0.006 Period 15
Period 16 0.728
0.534
0.394 0.292
0.218
0.163
0.123
0.003
0.054 0.042
0.032 0.025
0.019 0.015
0.012
0.005 Period 16
0.020
0.016
Period 17 0.714
0.513
0.371 0.270
0.198
0.148
0.108
0.080
0.060
0.045
0.034
0.026
0.015 0.012
0.009
0.003
Period 17
Period 18 0.700
0.494
0.350 0.250
0.180
0.130
0.095
0.069
0.051
0.038 0.028
0.021
0.012
0.009
0.007
0.002 Period 18
Period 19 0.686
0.475
0.331
0.232
0.184
0.118
0.083
0.060
0.043
0.031
0.023
0.017
0.012
0.009
0.007
0.005
0.002 Period 19
0.312 0.215
0.294 0.190
Period 20 0.673
0.456
0.140
0.104
0.073
0.051
0.037
0.028
0.019
0.014
0.010
0.007
0.005
0.004
0.001 Period 20
Period 21 0.660
0.439
0.135
0.093
0.083
0.084
0.056
0.044
0.031
0.022 0.015
0.011
0.008
0.006
0.004
0.003
0.001 Period 21
Period 22 0.647
0.422
0.278
0.184
0.123
0.038
0.026
0.018
0.013
0.000
0.006
0.004
0.003
0.002
0.001 Period 22
Period 23 0.634
0.406
0.262
0.170
0.112
0.074
0.049
0.033
0.022
0.015
0.010
0.007
0.005
0.003 0.002
0.002
0.000 Period 23
Period 24 0.622
0.390
0.247
0.158
0.102
0.086
0.043
0.028
0.019
0.013
0.008
0.006
0.004
0.003
0.002
0.001
0.000 Period 24
Period 25 0.610
0.375
0.233 0.148
0.092 0.059
0.038
0.024
0.016
0.010
0.007
0.005
0.003
0.002 0.001
0.001
0.000 Period 25
Period 26 0.598 0.361
0.220
0.135
0.084 0.053 0.033
0.021
0.014
0.000
0.006
0.004 0.002 0.002 0.001
0.001
0.000 Period 26
Period 27 0.586
0.347
0.207
0.125
0.076
0.047
0.020
0.018
0.011
0.007
0.005
0.003
0.002
0.001
0.001
0.001
0.000 Period 27
Period 28 0.574
0.333
0.196 0.116
0.069 0.042 0.026
0.016
0.010
0.006
0.004
0.002
0.002
0.001 0.001
0.000
0.000 Period 28
Period 29 0.563
0.321
0.185
0.107
0.083
0.037
0.022
0.014
0.008
0.005
0.003
0.002
0.001
0.001
0.000
0.000
0.000
Period 29
Period 30 0.552
0.308
0.174
0.009
0.057
0.033
0.020
0.012
0.007
0.004
0.003
0.002
0.001
0.001
0.000
0.000
0.000 Period 30
Period 35 0.500
0.253
0.130
0.068
0.036
0.019
0.010
0.006
0.003
0.002
0.001
0.001
0.000
0.000
0.000
0.000
0.000 Period 35
Period 40 0.453
0.208
0.097
0.046
0.022
0.011
0.005
0.003
0.001
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.000 Period 40
Print
Done

Accepted Answer

The Net Present Value of costs:
The net present value of costs is the total present value of the…