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

?