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A company is considering two alternatives with the following Before - Tax Cash Flows: ALT 1 = EOY 0 = - 1 0 0 0

A company is considering two alternatives with the following Before-Tax Cash Flows: ALT 1= EOY 0=-10000, EOY 1-10=4500, ALT 2= EOY 0=-20,000, EOY 1-10=4500, EOY 11-20=4500. Both alternatives will be depreciated by straight line depreciation over a 10 year depreciable life and no salvage value. If the company has an after taxes minimum attractive rate of return of 10% and has a 40% combined state and federal tax rate, which alternative should the company choose based on after tax present worth?

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