You are looking for security for your business. Your firm does highly confidential work so you absolutely must have security. You have found two options. The first option is a high tech solution with door sensors, motion detectors, cameras and card readers for door access. The second option is rather low tech. You would upgrade your door locks and hire a guard to be on duty overnight. The costs for each of these options is shown below. If your cost of capital is 8% which option should you select? Support your answer with the appropriate discounted cash flow analysis.Upfront CostAnnual CostLength of ContractHi Tech$200000$ 8,0007Low Tech$ 10,000$ 50,0003 %24%24You are looking for security for your business. Your firm does highlyconfidential work so you absolutely must have security. You have foundtwo options. The first option is a high tech solution with door sensors,motion detectors, cameras and card readers for door access. The secondoption is rather low tech. You would upgrade your door locks and hire aguard to be on duty overnight. The costs for each of these options isshown below. If your cost of capital is 8%, which option should you select?Support your answer with the appropriate discounted cash flow analysis.LengthUpfrontAnnualofCostCostContract7.0000Hi Tech$ 10,000Tech3.Edit View Insert Format Tools Table12pt vParagraph vX00五。冒回

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Answered: You are looking for security for your…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter13: Agency Conflicts And Corporate Governance

Section: Chapter Questions

Problem 1eM

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You are looking for security for your business. Your firm does highly confidential work so you absolutely must have security. You have found two options. The first option is a high tech solution with door sensors, motion detectors, cameras and card readers for door access. The second option is rather low tech. You would upgrade your door locks and hire a guard to be on duty overnight. The costs for each of these options is shown below. If your cost of capital is 8% which option should you select? Support your answer with the appropriate discounted cash flow analysis.

Upfront CostAnnual CostLength of ContractHi Tech$200000$ 8,0007Low Tech$ 10,000$ 50,0003

%24
%24
You are looking for security for your business. Your firm does highly
confidential work so you absolutely must have security. You have found
two options. The first option is a high tech solution with door sensors,
motion detectors, cameras and card readers for door access. The second
option is rather low tech. You would upgrade your door locks and hire a
guard to be on duty overnight. The costs for each of these options is
shown below. If your cost of capital is 8%, which option should you select?
Support your answer with the appropriate discounted cash flow analysis.
Length
Upfront
Annual
of
Cost
Cost
Contract
7.
0000
Hi Tech
$ 10,000
Tech
3.
Edit View Insert Format Tools Table
12pt v
Paragraph v
X
00
五。
冒回

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