: A business has two investment choices. Option 1 requires an immediate outlay of $2,000 and offers a return of $6,000 in seven years. Option 2 requires an immediate outlay of $1,500 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 10% p.a., compounded semi-annually. Compute the net present value and internal rate of return of each alternative and determine which investment should be accepted or rejected according to the net present value criterion.