Three different plans were presented to the us gao


Three different plans were presented to the US GAO (Government Accountability Office) by a high-technology facilities manager for operating a small weapons production facilities. Plan A would involve renewable 1-year contracts with payments of $1 million at the beginning of each year. Plan B would be a 2-year contract, and it would require four payments of $600,000 each, with the first one to be made now and the other three at 6-month intervals. Plan C would be a 3-year contract, and it would entail a payment of $1.5 million 2 years from now. Assuming that GAO could renew any of the plans under the same conditions if it wants to do so, which plan is better on the basis of a present worth analysis at an interest rate of 6% per year, compounded semiannually? (Hint: Calculate LCM.)

Request for Solution File

Ask an Expert for Answer!!
Business Economics: Three different plans were presented to the us gao
Reference No:- TGS01463061

Expected delivery within 24 Hours