Question
An unavoidable cost may be met by outlays of $90,000 now and $4,500 at the end of every six months for three years (Alternative 1)
An unavoidable cost may be met by outlays of $90,000 now and $4,500 at the end of every six months for three years (Alternative 1) or by making monthly payments of $1,970 for seven years (Alternative 2). Interest is 12% compounded annually. 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 ____
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.)
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