A company must make a choice between two investment alternatives. Alternative 1 will return the company

$15,000

at the end of

two

years and

$70,000

at the end of

nine

years.

Alternative 2

will return the company

$8,500

at the end of each of the next

nine

years. The company normally expects to earn a rate of return of

18%

on funds invested. Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion.

The present value of Alternative 1 is $

(Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)

The present value of Alternative 2 is $

(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 2.

Alternative 1.