A fine dining restaurant has to make payments of 1000 annually for the next 5 years. The restaurant has these following options of investments:
Investment Price Subsequent Cash Flows A 1500 500 annually for 5 years
B 500 1000 at the end of year 5
? 1000 500 annually for 4 years
D 4000 1000 annually for 5 years
We can purchase as many investment as we want, as long as the purchases are made in whole units. The restaurant wants to fully immunize this over the next five years. All annual payments and cash flows are made at the end of each year. Calculate the lowest possible cost to achieve the full immunization.