Question
Problem 7-24 A firm must choose between two investment alternatives, each costing $100,000. The first alternative generates $30,000 a year for five years. The second
Problem 7-24
A firm must choose between two investment alternatives, each costing $100,000. The first alternative generates $30,000 a year for five years. The second pays one large lump sum of $168,600 at the end of the fifth year. If the firm can raise the required funds to make the investment at an annual cost of 8 percent, what are the present values of two investment alternatives? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. PV(First alternative): $ PV(Second alternative): $
Which alternative should be preferred? The -Select-firstsecondItem 3 alternative should be preferred.
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