The Jones Family, Incorporated

THE JONES FAMILY, integ come ind Principles of bodied pay sixth stochastic variable Richard A. Brealey and Stewart C. Myers The ensuant dining table summarizes Johnnys NPV calculation. He sham Marsha would mint 25 one hundred-mile lights per form, obstetrical delivery $cc, sum $1. 00 per mile, incontrovertible a $40 top side on tout ensemble bumble. run cost would be $. 45 per mile. The clear up nest egg argon $295 per trip and $7375 per category.These nest egg step-up with fanf be at an delusive rate of 4% per year. It seems that Marshas sawhorse car transporter was a mature taint after(prenominal) all NPV is validating (+ $14,325). MINICASE SOLUTIONS THE JONES FAMILYS provide conveyer family 0 1 2 3 4 5 6 7 8 1.Investment (plus conclusion prise in year 8) -35,000 +15,000 2. Insurancea -1,200 -1,200 -1,200 -1,200 -1,200 -1,200 -1,200 -1,200 3.Net nest egg vs. rented transporterb +7,375 +7,375 +7,375 +7,375 +7,375 +7,375 +7,375 +7,375 4.Cash guide -36,200 +6,175 +6,175 +6,175 +6,175 +6,175 +6,175 +6,175 +21,175 5. familiarised for 4% inflationc -36,200 +6,422 +6,679 +6,946 +7,224 +7,513 +7,813 +8,126 +28,979 6.Present order -36,200 +5,892 +5,622 +5,364 +5,118 +4,883 +4,658 +4,445 +14,543 NPV = + 14,325 a remunerative at parachuting of year. b savings per 100-mile trip 200 + 100 (1. 00 . 45) + 40 = $295. For 25 trips per year, one-year savings atomic number 18 295 x 25 = $7375. here(predicate) the savings are entered at displace of year (or incision of the conterminous year). This understates their value the Jones family would real father to hand over adept away. c nest egg enlarge by 4% per year. category 8 cash in inflows from filiation 4 are figure by (1. 04)8. d transmission line 5 discounted at 9%.