For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 350 units, and the total annual inve
1 answer:
You might be interested in
Answer:
PV of 1st option = $185,015.50
PV of 2nd option = $192,683.78
Explanation:
Computing the present value of the monthly payments, we use the formula
Where PV = present value of the monthly payments
A = monthly salary
r = monthly interest rate = 6%/12 = 0.5% = 0.005
n = number of months = 24 months
PV of the 1st option, $8,200 monthly for the next 2 year
= $185,015.50.
PV of the 2ns option, $6,900 monthly + $37,000 signing bonus
= $155,683.78 + $37,000 = $192,683.78.