When a company makes marketing decisions by considering consumers' wants and interests, the company's requirements, and society'
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Answer:
Goal: maximize return at the end of the fourth year.
Future value of each option:
First choise: $ 11,730,289.64
Second choise: $ 12,559,457.84
<em>Conclusion: </em>
<em>It is better to pick the second option as yields a better return </em>
Explanation:
We solve for the future value of the cashflow of each option:
First choise:
End of the first year:
Principal 2,000,000.00
time 36.00 (form end of the first to end of the fourth)
rate 0.00917 (11% / 12 months as it compounds monthly)
<em>Amount $2,777,757.26</em>
End of the second year:
Principal 2,000,000.00
time 24.00
rate 0.00917
<em>Amount $2,489,657.04</em>
<em>End of the third year:</em>
Principal 4,000,000.00
time 12.00
rate 0.00917
<em>Amount $4,462,875.34</em>
End of the fourth year: $2,000,000
Total:
<em>$2,777,757.26</em>
<em>$2,489,657.04</em>
<em>$4,462,875.34 </em>
<u>$2,000,000 </u>
$ 11,730,289.64
<u>Second choise:</u>
First year
Principal 1,000,000.00
time 36.00
rate 0.00917
Amount 1,388,878.63
Second year:
Principal 1,000,000.00
time 24.00
rate 0.00917
Amount 1,244,828.52
Third Year
Principal 8,000,000.00
time 12.00
rate 0.00917
Amount 8,925,750.69
Fourth year: 1,000,000
<em>Total</em>
1,388,878.63
1,244,828.52
8,925,750.69
<u>1,000,000.00 </u>
12,559,457.84
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