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A firm must choose between two investments alternatives, each costing the same amount. The first alternative generates $35,000 per year for 4 years. The second
A firm must choose between two investments alternatives, each costing the same amount. The first alternative generates $35,000 per year for 4 years. The second pays one large lump sum of $157,400 at the end of the fourth year, If the firm can raise the required funds to make the investment at an annual cost of 10%, which alternative should be preferred.
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