An investor has two investment alternatives. If he choose Alternative 1, he will have to make an immediate outlay of $7000 and will receive $500 every three months for the next nine years. If he chooses Alternative 2, he will have to make an immediate outlay $6500 and will receive $26,000 after eight years. If interest is 12% compounded quarterly, which alternative should the investor choose on the basis of the net present value Criterion? And which alternative should the investor choose on the basis of the Investment Ratio of Return.