In: Economics
Sammy's Ski Lodge has enough financial capital to undertake any
or all of the following projects: a.) If Sammy's only alternative to the above projects is putting
his money in the bank and earning 5% interest, what is the present
discounted value of each project's revenue stream? A. $5000 B. $5183 C. $5714 D. $5535 ii.) The PDV of project (II.)'s revenue stream is: A. $25,000 B. $23,809 C. $19,588 D. $21,647 iii.) The PDV of project (III.)'s revenue stream is: A. $117,529 B. $142,857 C. $129,884 D. $150,000 b.) Project (I) costs $5,800; project (II) costs $20,000; and
project (III) costs $100,000. What is the NPV (Net Present Value =
PDV of revenues minus PDV of costs) of each project? Which
project(s) will Sammy choose to undertake? Why? Remember he can
afford any or all of the projects. A. -$265 B. -$86 C. -$617 D. $200 ii.) The NPV of project (II.) is: A. -$412 B. $1647 C. $3809 D. $5000 iii.) The NPV of project (III.) is: A. $42,857 B. $50,000 C. $17,529
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