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A business has two investment choices. Alternative 1 requires an immediate outlay of $3,300 and offers a return of $8,000 in seven years. Alternative 2
A business has two investment choices. Alternative 1 requires an immediate outlay of $3,300 and offers a return of $8,000 in seven years. Alternative 2 requires an immediate outlay of $1,300 in return for which $250 will be received at the end of every six months for the next seven years. The required rate of return on investment is 12% 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 The net present value of Alternative 1 is $0 (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) The net present value of Alternative 2 is $0 (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) The preferred alternative is Alternative 1
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