Question
Consider the two one-shot investment alternatives shown in the table below. Neither alternative is expected to be available again in the future. MARR is 11
Consider the two one-shot investment alternatives shown in the table below. Neither alternative is expected to be available again in the future. MARR is 11 %/year.
| End of Year | Alternative W | Alternative X |
| 0 | -$100,000 | -$150,000 |
| 1 | $20,000 | $40,000 |
| 2 | $20,000 | $45,000 |
| 3 | $50,000 | $50,000 |
| 4 | $80,000 | $55,000 |
| 5 | $110,000 | $60,000 |
| 6 | $65,000 | |
| 7 | $70,000 |
What is the present worth of each alternative?
Based on a present worth analysis, which alternative is preferred?
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Computational Techniques In Economics And Finance
Authors: Constantin Zopounidis
1st Edition
1613245580, 978-1613245583
