Question

Part 1: [5 marks] Based on the capitalized cost analysis, which option is better: Option A: paying 220 JD every 5 years forever starting 5 years from now at an interest rate of 10% per year. Option B: paying 45 JD every year forever at an interest rate of 12% per year. Part 2: [10 marks] John, who works at Swatch, has decided to use the weighted attribute method to compare three systems for manufacturing a watchband. The vice president and her assistant VP have evaluated each of three attributes in terms of importance to them, and John has placed an evaluation from 0 to 100 on each alternative for the three attributes. John's ratings for each alternative are as follows: 

          Part 1: [5 marks]
Based on the capitalized cost analysis, which option is
better:
Option A: paying 220 JD every 5 years forever starting 5
years from now at an interest rate of 10% per year.
Option B: paying 45 JD every year forever at an interest
rate of 12% per year.
Part 2: [10 marks]
John, who works at Swatch, has decided to use the
weighted attribute method to compare three systems for
manufacturing a watchband. The vice president and her
assistant VP have evaluated each of three attributes in
terms of importance to them, and John has placed an
evaluation from 0 to 100 on each alternative for the three
attributes. John's ratings for each alternative are as
follows:
Show more…
Part 1: [5 marks] Based on the capitalized cost analysis, which option is better: Option A: paying 220 JD every 5 years forever starting 5 years from now at an interest rate of 10% per year. Option B: paying 45 JD every year forever at an interest rate of 12% per year. Part 2: [10 marks] John, who works at Swatch, has decided to use the weighted attribute method to compare three systems for manufacturing a watchband. The vice president and her assistant VP have evaluated each of three attributes in terms of importance to them, and John has placed an evaluation from 0 to 100 on each alternative for the three attributes. John's ratings for each alternative are as follows:

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Gregory Mankiw 8th Edition
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Part 1: [ 5 marks] Based on the capitalized cost analysis, which option is better: Option A: paying 220 JD every 5 years forever starting 5 years from now at an interest rate of 10% per year. Option B: paying 45 JD every year forever at an interest rate of 12% per year. Part 2: [10 marks] John, who works at Swatch, has decided to use the weighted attribute method to compare three systems for manufacturing a watchband. The vice president and her assistant VP have evaluated each of three attributes in terms of importance to them, and John has placed an evaluation from 0 to 100 on each alternative for the three attributes. John's ratings for each alternative are as follows: Part 1:[5 marks] Based on the capitalized cost analysis,which option is better: Option A:paying 220 JD every 5years forever starting 5 Option B:paying 45 JD every year forever at an interest rate of 12% per year. Part2:[10marks] John,who works at Swatch,has decided to use the weighted attribute method to compare three systems for manufacturing a watchband.The vice president and her assistant VP have evaluated each of three attributes in terms of importance to them,and John has placed an evaluation from 0 to 100 on each alternative for the three attributes.John's ratings for each alternative are as follows:
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Transcript

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00:01 So here in this question we have to just know the net present value for the options for the company cost of capital and for the company cost of capital we are having the 6 % rate and the initial cost initial cost and that will be minus dollar one seven zero triple zero for the year first and for all the year when we discuss the present value table so we can add all the year with the add on the present value so that 0 .94 0 .89 after that 0 .83 0 .79 0 .74 0 .70 and 0 .66 adding all these value we are having this structure that is the dollar 81814 .58 and the profitability index…
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