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Annual expenses for two alternatives have been estimated on different bases as follows: If the average general price inflation rate is expected to be 4%

Annual expenses for two alternatives have been estimated on different bases as follows: If the average general price inflation rate is expected to be 4% per year and the real rate of interest is 8% per year, show which alternative has the least negati ve equivalent worth in the base period?

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Alternative A Alternative B Annual Expenses Annual Expenses Estimated in Real Year Actual DollarsDollars with b0 End of Estimated in 2 3 4 $120,000 132,000 148,000 160,000 $100,000 110,000 120,000 130,000

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