A business has two investment choices. Alternative 1 requires an immediate outlay of

$3,500

and offers a return of

$11,000

in

eight

years. Alternative 2 requires an immediate outlay of

$4,700

in return for which

$600

will be received at the end of every six months for the next

eight

years. The required rate of return on investment is

14%

semi-annually. Compute the net present value of each alternative and determine which investment should be accepted or rejected according to the net present value criterion.