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Four investment alternatives (A, B, C, and D) are under consideration. The present worth (PW) for each alternative is $187,500, $300,000, $225,000, and $262,500. The

Four investment alternatives (A, B, C, and D) are under consideration. The present worth (PW) for each alternative is $187,500, $300,000, $225,000, and $262,500. The payback periods (PP) for the alternatives were 2, 3, 1, and 4 years. The risk levels (RL) associated with each alternative are quite different, with A being most risky, D being least risky, and B and C being equally risky. The weights for PW, PP, and RL have been assigned as 30, 45, and 25. The following ratings have been assigned to each alternative for each factor:

Alternative A

Alternative B

Alternative C

Alternative D

PW

6.3

10.0

7.5

8.8

PP

9.1

7.7

10.0

5.8

RL

7.5

9.0

9.0

10.0

Using the weighted factor comparison method, which alternative would be recommended?

Alternative A

Alternative D

Alternative B

Alternative C

Enter the values used to determine your answer in part (a). Alternative A Total:

Alternative B Total:

Alternative C Total:

Alternative D Total:

Carry all interim calculations to 5 decimal places and then round your final answers to the nearest whole number. The tolerance is 3%.

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