In: Operations Management
There are two business deals:The business deal A reveals that you have to invest$250,000today. After that you will get $75,000in a year, $75,000in two years, $100,000 in three years, and $100,000in four years. On the other hand, another business deal B has the$300,000initially investment. After that you will get $75,000 in a year,$75,000 in two years, $100,000 in three years, and $150,000 in four years.Please respond to the following questions:
a)If the current interest rate is 10% APR, what is the Present Value of each business deal?(2ptseach)
b)Which business deal will you take?(2 pts)Why?(2pts