Four investment alternatives (A, B, C, and D) are under consideration. The prese
ID: 2397084 • Letter: F
Question
Four investment alternatives (A, B, C, and D) are under consideration. The present worth (PW) for each alternative is $187,500, $300,000, $225,000, and $262,500. The payback periods (PP) for the alternatives were 2, 3, 1, and 4 years. The risk levels (RL) associated with each alternative are quite different, with A being most risky, D being least risky, and B and C being equally risky. The weights for PW, PP, and RL have been assigned as 30, 45, and 25. The following ratings have been assigned to each alternative for each factor:
Alternative A
Alternative B
Alternative C
Alternative D
PW
6.3
10.0
7.5
8.8
PP
9.1
7.7
10.0
5.8
RL
7.5
9.0
9.0
10.0
Using the weighted factor comparison method, which alternative would be recommended?
Alternative A
Alternative D
Alternative B
Alternative C
Enter the values used to determine your answer in part (a).
Alternative A Total:
Alternative B Total:
Alternative C Total:
Alternative D Total:
Carry all interim calculations to 5 decimal places and then round your final answers to the nearest whole number. The tolerance is ±3%.
Alternative A
Alternative B
Alternative C
Alternative D
PW
6.3
10.0
7.5
8.8
PP
9.1
7.7
10.0
5.8
RL
7.5
9.0
9.0
10.0
Helo I S Four i weights for PW, PP, and RL have been as 30, 45, and 25. The following ratings have been assigned to each alternative for each factor 10.0 10.0 Alternative D Alternative B .86Explanation / Answer
Alternative A Alternative B Alternative C Alternative D Weights PW 6.3 10 7.5 8.8 30% PP 9.1 7.7 10 5.8 45% RL 7.5 9 9 10 25% Weighted factor 7.86000 8.71500 9.00000 7.75000 Under the weighted factor comparison Alternative C would be recommended.
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