::::IIVU ASKARII:::: mgt201_gdb_idea plz check this one

mgt201 gdb idea (shared one )

This is annuity concept so first we bring all the values to one common point and then compare. Here first we find the present value of Alternative A and then find the present value of B and compare which ever is higher that will be acceptable.

Value of alternative A= =4000/1.11+4000/(1.11^2)+4000/(1.11^3)+4000/(1.11^4)+4000/(1.11^5)+4000/(1.11^6)+4000/(1.11^7)+4000/(1.11^8)+4000/(1.11^9)+4000/(1.11^10) 
= 23556.93 

Value of alternative B= 54000/(1.1^10) 
= 20819.34 

Alternative that is acceptable= Option A 

Reason=  Because Option A will be higher in present value than option B 

thanks to zeeshan 

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