1 the first question is only there for reference.please do not answer it.Suppose that the City of Nairobi is planning a bid to host the 2032 Olympics and hasestimated the following benefits:The estimate. enefits at the end of year 1 (a,) are $300 million, at the end of year 2(B,) are $200 million, and at the end of year 3 (a,) only $100 million (after the thirdyear there are no further benefits). If the estimated interest rate is 4% (r - 0.04) thenusing the estimated value of benefits equation below, calculate the maximum value(and therefore, the maximum amount that Nairobi should bid) for the 2032 Olympics.V-$555,421,869If the actual benefits turned out to be $590 million in year 1 (8,) and then no furtherbenefits. The actual interest rate turns out to be 5.5% (r- 0.055) then the bid made inthe previous question results in)a loss of $15,570,730a loss of $3,030,711Oa profit of $3,819,837Oa profit of $24,252,735

The bid amount: The maximum amount that the City of Nairobi can bid is the present value of the…

If the actual benefits turned out to be $590 million in year 1 (8,) and then no further benefits. The actual interest rate turns out to be 5.5% (r-0.05s) then the bid made in the previous yuestion results in a loss of $15,570,730 a loss of $3,030,711 Oa profit of $3,819,837 a profit of $24,252,735

If the actual benefits turned out to be $590 million in year 1 (8,) and then no further benefits. The actual interest rate turns out to be 5.5% (r-0.05s) then the bid made in the previous yuestion results in a loss of $15,570,730 a loss of $3,030,711 Oa profit of $3,819,837 a profit of $24,252,735

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 28P: Friedman Company is considering installing a new IT system. The cost of the new system is estimated...

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