a. You are in a management position with $5000 available cash. You have the option of investing the money for five years

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A You Are In A Management Position With 5000 Available Cash You Have The Option Of Investing The Money For Five Years 1 (34.11 KiB) Viewed 34 times

a. You are in a management position with $5000 available cash. You have the option of investing the money for five years with a fixed interest rate of 10 percent per annum. You also must decide on investing the money either annually, semi-annually, or quarterly Given the options available to you, which investment decision will you take and why? (15 marks) b. The manager of a firm is thinking about the purchase of a new machine that will cost $300,000 and has a useful life of five years and a 10 percent interest rate. The machine will yield (year-end) cost reductions to Products of $50,000 in year 1, $60,000 in year 2. $75,000 in year 3, and $90,000 in years 4 and 5 respectively. Should the manager purchase the machine? Explain your answer. (15 marks)