You have been tasked with fielding an interactive video communications systems. Your job is to provide...

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You have been tasked with fielding an interactive videocommunications systems. Your job is to provide the U.S. Army withthe least expensive system (for the next 5 years) from thefollowing alternatives:
1. Intertactical. An interactive communications system designedto rely on current satellite systems. The Army must spend$10,590,843.42 now. (t = 0) and $1.7 million this year. (t = 1),increasing that investment by 13% in subsequent years for 4additional years. (t = 2 through 5).
2. TacLine. Provides interactive communications that operatethrough existing phone lines. The Army must spend $4 million now (t= 0) and $3 million dollars this year (t = 1), increasing itsinvestment by $500,000 each year thereafter for 4 additional years(t = 2 through 5).
(a) Draw and label a cash flow diagram for each of theseventures.
(b) Prepare a cash flow (CF) table in Excel for each of theseventures.
(c) Using an annual interest rate of 8%, conduct a present worthanalysis for the first venture (Intertactical).
(d) Using an annual interest rate of 8%, conduct a present worthanalysis for the second venture (TacLine).
(e) Are these two ventures equivalent? Why or why not?

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4.2 Ratings (516 Votes)

Part aCash flow diagram for each of the two venturesFor Intertactical cash flowin year 2 C2 C1x 1 13 1700000 x1 13 See Answer

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You have been tasked with fielding an interactive videocommunications systems. Your job is to provide the U.S. Army withthe least expensive system (for the next 5 years) from thefollowing alternatives:1. Intertactical. An interactive communications system designedto rely on current satellite systems. The Army must spend$10,590,843.42 now. (t = 0) and $1.7 million this year. (t = 1),increasing that investment by 13% in subsequent years for 4additional years. (t = 2 through 5).2. TacLine. Provides interactive communications that operatethrough existing phone lines. The Army must spend $4 million now (t= 0) and $3 million dollars this year (t = 1), increasing itsinvestment by $500,000 each year thereafter for 4 additional years(t = 2 through 5).(a) Draw and label a cash flow diagram for each of theseventures.(b) Prepare a cash flow (CF) table in Excel for each of theseventures.(c) Using an annual interest rate of 8%, conduct a present worthanalysis for the first venture (Intertactical).(d) Using an annual interest rate of 8%, conduct a present worthanalysis for the second venture (TacLine).(e) Are these two ventures equivalent? Why or why not?