Please use the Interest and Annuity Tables for Discrete Compounding

Question 2 Cost information for two alternatives is shown below. The service lives of Alternative 1 and 2 are 5 years and 3 years, respectively. Consider 7% annual interest rate. compounded annually. Select the best alternative. Consider the PW as your selection criterion. Table 1. Cost Information Alternative 1 $15,000 7,000 -7,000 7,000 -7,000 7,000 Alternative 2 $20,000 -2,000 -2,000 -2,000 Year Initial Cost 2 5 Interest and Annuity Tables for Discrete Compounding For various values of i from % to 25% i effective interest rate per period (usually one year) N = number of compounding periods (F/P, i%,N) = (1 + (A/F,1%, N) = (1 +-1 ili(1 + iy (1+i)N