Sammy's Ski Lodge has enough financial capital to undertake any or all of the following projects: I. Buying a lift machine that will last 3 years and produce $3000 worth of services the first year, $2000 the second year, and $1000 the third year.
II. Developing and building a robot lift operator that will last 5 years and produce $5000 worth of services each year.
III. Building a new restaurant that will last 5 years and produce $30,000 worth of food and drink sales each year.

Required:
a. If Sammy's only alternative to the above projects is putting his money in the bank and earning 5% interest, what is the present discounted value of each project's revenue stream?
b. The PDV of project (I.)'s revenue stream is:
c. The PDV of project (II.)'s revenue stream is:
d. The PDV of project (III.)'s revenue stream is:
e. Project (I) costs $5,800; project (II) costs $20,000; and project (III) costs $100,000. What is the NPV (Net Present Value = PDV of revenues minus PDV of costs) of each project? Which project(s) will Sammy choose to undertake? Why?

Solution :

Project 1

Year  Cash Flow       PVF at rate 5%          PV

1          3000               0.952381              2857.143

2         2000               0.907029            1814.059

3         1000                0.863838            863.8376

Therefore, total PDV = 5535.039

The revenue stream of PDV of project 1 = 5535.039

Project 2

Year  Cash Flow       PVF at rate 5%          PV

1          5000               0.952381              4761.905

2         5000               0.907029             4535.147

3         5000               0.863838              4319.188

4         5000              0.822702               4113.512

5        5000                0.783526             3917.631

Therefore, total PDV = 21647.38

The revenue stream of PDV of project 2 = 21647.38

Project 3

Year  Cash Flow       PVF at rate 5%          PV

1          3000               0.952381              28571.43

2         3000               0.907029             27210.88

3         3000               0.863838              25915.13

4         3000              0.822702               24681.07

5         3000                0.783526             23505.78

Therefore, total PDV = 129884.3

The revenue stream of PDV of project 3 = 129884.3

The NPV

For Project 1  :     PVCI - PVCO

                          = 5535 - 5800

                         = -265

For Project 2  :     PVCI - PVCO

                          = 21647 - 20000

                         = 1647

For Project 3  :     PVCI - PVCO

                          = 129884 - 100000

                         = 29884

Therefore, project 2 and 3 will be chosen.

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.

c.

explanation:

regressive tax taxes the poor and less of the wealthy. this the rich get richer and the poor get more poor. this would create a large wealth gap.