34. Video Solution Two new opportunities are being considered for a venture capital fi rm. Both are one-time opportunities with no option for renewal. The fi rm uses a 12 percent/year expected rate of return for decisions of this type.

The relevant characteristics for each option are shown below. Based on a present worth analysis, which option is preferred?

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Initial Investment Option 1 $100,000 Option 2 $75,000 9 years $14,300 Estimated Life Expected Annual Return 12 years $16,500