This assignment extends the garbage truck problem from prompt 2. Two other lenders provide alternative scenarios. Alternate lender 1 suggests that the inflation rate will be 4% and offers an interest rate of 7.5%, while alternate lender 2 suggests that the inflation rate will be 1% and offers an interest rate of 6.5%. For all three sources, the interest rates are guaranteed if the decision is made in the next 90 days. Which of the following decisions should be made and why?
a. The usual lender should be used because she offers a positive NPV.
b. Alternate lender 1 should be used because he offers the highest NPV.
c. The garbage trucks shouldn’t be purchased because there is a possibility of a negative NPV.
d. Alternate lender 2 should be used because most scenarios have a positive NPV and she offers the highest NPV under each scenario.
e. Each solution is as good as any other.
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