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Compare the alternatives shown below on the basis of their capitalized costs, using a nominal interest rate 12% per year, compounded quarterly. (Hint: calculate
Compare the alternatives shown below on the basis of their capitalized costs, using a nominal interest rate 12% per year, compounded quarterly. (Hint: calculate effective rate per payment period first). Calculate the Capitalized Cost for each alternative and select the best option. Do not select until you have calculated the Capitalized Cost for each alternative. Alternative A Alternative B First Cost in $ -350,000 -700,000 Quarterly income, $/quarter +55,000 +40,000 Salvage value, $ Life, in quarters +50,000 0.00 12 quarters
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