Security service for a corporation housed in a large office building/training complex can be provided in one of two ways. A service contract for 4 years will cost $35,000 per year, payable at the beginning of each year. If renewed for 4 more years, the cost will be $38,000 per year. A different service contract can be obtained at a lower cost of $ 27,151 per year, provided the corporation purchases certain equipment that will cost $102,979 and have a life of 9 years with salvage value of 7.6 % of the investmen t. Supplies costing $6,331 per year will also be needed for this option. At an interest rate of 24.7 % per year, the present worth of the second alternative is