On EXCEL 1-You are going to buy a $350,000 building in cash and will depreciate the asset...

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On EXCEL
1-You are going to buy a $350,000 building in cash and willdepreciate the asset over 30 years. Assume the building value willincrease 2% per year each year for 20 years. If inflation isconstant at 2.2% per year, what is the opportunity cost of thebuilding?
2. You give a loan to your friend to buy equipment for hisbusiness. The friend puts $4000 of their own money as a downpayment, you lend them $12,000. The equipment is $16,000 total. Youwill charge your friend 4.0% Interest every year and will collectmonthly payments for 60 months. Inflation is 1.7% per year,constant for 5 years.
2a. What is the monthly payment you will collect?
2b. What is the total amount of payments you will collect?
2c. What is the vehicle worth at the end of the loan term if itdepreciates in value at $150 each month?
2d. What is the NPV of the loan assuming it is paid each monthon time?
2e. What is the opportunity cost of the loan you give to yourfriend if you could invest the same amount and receive a 4.5%return each month?
2f. Given the opportunity cost would you lend your friend themoney?
3-Your business is looking to invest $20,000 in a new worktruck. The truck will last about 10 years and will have a secondhand resale value of $2000 after its useful life for parts to otherowners. Assume inflation is a 2% constant.
3a What is the opportunity cost of the truck if you simply justdon't buy it? What other items might need to be considered tofurther evaluate this?
3b If i told you the truck would also cost $1500 per year inmaintenance how would the opportunity cost change?
3c Do not include the maintenance costs in 3b and calculate boththe net cost and the opportunity cost of the truck if it produces$1000 per year in income for your business.

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1 Following are the data given in the questionCost of house350000Depreciation30yearsValueappreciation2every year for 20yearsInflation220Opportunity cost opportunity cost is the missed benefits ofan individual investor business misses out on when choosing onealternative over otherFormula for calculating opportunity cost will be Return onbest foregone option Return of chosen optionHere we have to adjust the inflation in See Answer

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On EXCEL1-You are going to buy a $350,000 building in cash and willdepreciate the asset over 30 years. Assume the building value willincrease 2% per year each year for 20 years. If inflation isconstant at 2.2% per year, what is the opportunity cost of thebuilding?2. You give a loan to your friend to buy equipment for hisbusiness. The friend puts $4000 of their own money as a downpayment, you lend them $12,000. The equipment is $16,000 total. Youwill charge your friend 4.0% Interest every year and will collectmonthly payments for 60 months. Inflation is 1.7% per year,constant for 5 years.2a. What is the monthly payment you will collect?2b. What is the total amount of payments you will collect?2c. What is the vehicle worth at the end of the loan term if itdepreciates in value at $150 each month?2d. What is the NPV of the loan assuming it is paid each monthon time?2e. What is the opportunity cost of the loan you give to yourfriend if you could invest the same amount and receive a 4.5%return each month?2f. Given the opportunity cost would you lend your friend themoney?3-Your business is looking to invest $20,000 in a new worktruck. The truck will last about 10 years and will have a secondhand resale value of $2000 after its useful life for parts to otherowners. Assume inflation is a 2% constant.3a What is the opportunity cost of the truck if you simply justdon't buy it? What other items might need to be considered tofurther evaluate this?3b If i told you the truck would also cost $1500 per year inmaintenance how would the opportunity cost change?3c Do not include the maintenance costs in 3b and calculate boththe net cost and the opportunity cost of the truck if it produces$1000 per year in income for your business.